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Popular Word Problems >

Darren invests 4, 500 into an account that earns 5% annual interest. How much will be in the account after 10 years if the interest rate is compounded quarterly?

Solution

D a rre n in v es t s 4, 500 in t o an a cco u n t t ha t e a r n s 5% ann u a l in t eres t . Ho w m u c h w i ll b e in t h e a cco u n t a f t er 10 ye a rs i f t h e in t eres t r a t e i s co m p o u n d e d q u a r t er l y ?

Solution

Amount : 7396.29

Solution steps

Translate the problem into an equation:

A = 4500 (1 + \frac{0.05}{4})^{4 \cdot 10}

4500 (1 + \frac{0.05}{4})^{4 \cdot 10} = 7396.28758 \dots

Round to the nearest hundredth:

7396.29

Amount : 7396.29

Popular Examples

After saving money for 3 years at a 5% interest rate compounded monthly, Henry accumulated a total of 2800. How much money did he put into the bank when he started the savings plan?if 7 is added to five times a number the result is equal to three times the number 4 times the sum of a number and-5 equals 24. What is the number?Jonah inherited some money from his grandfather and put it in a bank account that earns 6% interest compounded annually. After 5 years, Jonah had 600.00 in the bank account. How much interest did he earn?Use the formula for present value of money to calculate the amount you need to invest now in one lump sum in order to have 25,000 after 10 years with an APR of 8% compounded monthly. Round your answer to the nearest cent, if necessary.