Find how much money should be deposited in a bank paying interest at the rate of 9.5%/year compounded quarterly so that at the end of 2 years the accumulated amount will be $30,000.
A) $24,864 should be deposited in a bank.
B) $30,265 should be deposited in a bank.
C) $33,628 should be deposited in a bank.
D) $28,391 should be deposited in a bank.

Question

Find how much money should be deposited in a bank paying interest at the rate of 9.5%/year compounded quarterly so that at the end of 2 years the accumulated amount will be $30,000. ​
A) $24,864 should be deposited in a bank.
B) $30,265 should be deposited in a bank.
C) $33,628 should be deposited in a bank.
D) $28,391 should be deposited in a bank.

Quizplus · Accepted Answer

To find the initial deposit (P) for a future value (A) with compound interest, use the formula A = P(1 + r/n)^(nt), where A = $30,000, r = 9.5% or 0.095, n = 4 (quarterly), and t = 2 years. Rearranging for P gives P = A / (1 + r/n)^(nt). Substituting the given values yields P = $30,000 / (1 + 0.095/4)^(4*2) ≈ $24,864.

Find How Much Money Should Be Deposited in a Bank