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tramserran

Answer:  A = P(1.005)²⁰

Step-by-step explanation:

The formula for interest compounded over a period of time is:

[tex]A=P_o\bigg(1+\dfrac{r}{n}\bigg)^{nt}\qquad \text{where}[/tex]

  • A is accrued amount
  • P₀ is the initial amount invested
  • r is the interest rate (convert to a decimal)
  • n is the number of times compounded in a year
  • t is the number of years

It is given that r = 2% (0.02), n = quarterly (4), and t = 5

[tex]A=P_o\bigg(1+\dfrac{0.02}{4}\bigg)^{4\cdot 5}\\\\A = P_o(1+0.005)^{20}\\\\A=P_o(1.005)^{20}[/tex]

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