Answer:
A (in $USD) = 5,000(1 + .04/4)^4(8)
A = 5000(1 + 0.01)^32
A = 5000(1.01)^32
A = 5000(1.37494068)
A ≈ 6874.7034
A = $6875 or $6875.7 (depending on rounding requirement)
Step-by-step explanation:
Compound Interest Formula
A = P(1+ r/n)^n(t)
- A is the amount in the account after t years
- P is the principal (original amount invested)
- r is the annual rate, expressed as a decimal
- n the number of times the interest is calculated a year*
- t is the number of years
*If the interest is compounded monthly n = 12, if quarterly n = 4, if daily n = 365.
