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Rick's savings account has a balance of $5000. If he does not make a
withdrawal or deposit, how much money will be in Rick's account if it pays an
annual interest rate of 6% for 8 years compounded quarterly?

Respuesta :

semsee45

Answer:

$8,051.62

Step-by-step explanation:

Compound interest formula

[tex]\sf A=P(1+\frac{r}{n})^{nt}[/tex]

where:

  • A = final amount
  • P = principal
  • r = interest rate (in decimal form)
  • n = number of times interest applied per time period
  • t = number of time periods elapsed

Given:

  • P = $5000
  • r = 6% = 0.06
  • n = 4
  • t = 8

Substituting given values into the formula:

[tex]\implies \sf A=5000(1+\frac{0.06}{4})^{4 \times 8}[/tex]

[tex]\implies \sf A=5000(1.015)^{32}[/tex]

[tex]\implies \sf A=8051.62\:(nearest\:hundredth)[/tex]

Rate of interest

  • 0.06/4=0.015

So

Compound ineterest formula to be used

  • A=P(1+r)^t
  • A=5000(1+0.015)⁴×⁸
  • A=5000(1.015)³²
  • A=$8051.6

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