Jessica invested $10700 into an account with an interest rate of 4.7% per year compounded quarterly. How much money will be in the account after 1 month (rounded to the nearest hundredth)?
A) $11202.90
B) $10825.73
C) $12857.91
D) $11211.83
E) $239453.30

Question

Quizplus · Accepted Answer

First, we need to find the quarterly interest rate, which is 4.7% divided by 4 = 1.175%.
Next, we need to find the number of quarters in one month, which is 12 months per year divided by 4 quarters per year = 3 months.
So, the number of times the interest is compounded in one month is 3.
Using the formula A = P(1 + r/n)^(nt), where A is the amount of money after t years, P is the principal (initial investment), r is the interest rate (as a decimal), n is the number of times the interest is compounded per year, and t is the time in years:
A = 10700(1 + 0.0475/4)^(4/12*1) = $10825.73 (rounded to the nearest hundredth).
Therefore, the answer is B.

Jessica Invested $10700 into an Account with an Interest Rate