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You invest $15,000 in a savings account with an annual interest rate of 2.5% in
which the interest is compounded quarterly. How much money should you expect to
have in the account after 5 years? Show your work to receive full credit!​

Respuesta :

calculista

Answer:

[tex]\$16,990.62[/tex]  

Step-by-step explanation:

we know that    

The compound interest formula is equal to  

[tex]A=P(1+\frac{r}{n})^{nt}[/tex]  

where  

A is the Final Investment Value  

P is the Principal amount of money to be invested  

r is the rate of interest  in decimal

t is Number of Time Periods  

n is the number of times interest is compounded per year

in this problem we have  

[tex]t=5\ years\\ P=\$15,000\\ r=2.5\%=2.5/100=0.025\\n=4[/tex]  

substitute in the formula above

[tex]A=15,000(1+\frac{0.025}{4})^{4*5}[/tex]  

[tex]A=15,000(1.00625)^{20}[/tex]  

[tex]A=\$16,990.62[/tex]  

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