Find the total amount in the compound interest account.
-$12,000 is compounded quarterly at a rate of 14% for 20 years. (The compound interest factor is 15.67574.)

Question

Quizplus · Accepted Answer

We can use the formula for compound interest:

A = P(1 + r/n)^(nt)

Where:
A = final amount
P = principal (initial amount)
r = annual interest rate (as a decimal)
n = number of times the interest is compounded per year
t = time (in years)

Substituting the given values, we get:

A = 12000(1 + 0.14/4)^(4*20)
A = 188108.88 (rounded to the nearest cent)

Therefore, the total amount in the compound interest account is $188,108.88. The correct choice is C. The formula for compound interest is:
A = P(1+r/n)^(nt)
where:
A = the final amount
P = the principal (starting amount)
r = the annual interest rate (as a decimal)
n = the number of times the interest is compounded per year
t = the number of years

Using this formula, we can find the final amount in the account:
A = 12000(1+0.14/4)^(4*20) = $188,108.88

Therefore, the best choice is C.

Find the Total Amount in the Compound Interest Account