Question

1.
Find the Compound Amount.
Round to the nearest cent.

Amount = $980
Rate = 8%
Compounded = Quarterly
Time (Years) = 5





2.
Find the Interest Earned.
Round to the nearest cent.

Amount = $980
Rate = 8%
Compounded = Quarterly
Time (Years) = 5

Answer 1

1) 
Principal Amount = P = $980
Interest rate = r = 8% = 0.08
Compounding periods = n = 4
Time = t = 5 years

Formula to be used for finding compounding amount:

$A=P (1+ \frac{r}{n} )^{nt}$

Using the values in the formula, we get:

$A=980 (1+ \frac{0.08}{4} )^{5*4} =1456.23$

Therefore, the amount compounded over a period of 5 years will be $1456.23

2)
Principal Amount = $980
Compounded Amount = $1456.23
Interest Earned = Compounded Amount - Principal Amount
Interest Earned = 1456.23 - 980 = $ 476.23

Therefore, $476.23 interest will be earned over a period of 5 years.