Solve the problem.
-Andrea Gilfordʹs savings account has a balance of $453. After 2 years, what will the amount of Interest be at 4% compounded quarterly?
A) $37.53
B) $9.06
C) $28.53
D) $42.53

Question

Quizplus · Accepted Answer

The interest can be calculated using the formula for compound interest: A = P(1 + r/n)^(nt), where A is the amount of money accumulated after n years, including interest, P is the principal amount ($453), r is the annual interest rate (4%, or 0.04), n is the number of times that interest is compounded per year (quarterly, so n=4), and t is the time the money is invested for (2 years). Plugging in the values: A = 453(1 + 0.04/4)^(4*2) = 453(1 + 0.01)^8 ≈ 490.53. The interest earned is the final amount minus the principal: 490.53 - 453 = $37.53.

Solve the Problem. -Andrea Gilfordʹs Savings Account Has a Balance of $453. After