You invest an initial $1,000 in an account that has an annual interest rate of 2%, compounded quarterly. How much money will you have in the account after 5 years? Round your answer to the nearest whole number and include units.

Question

the growth/decay formula A = Pe^rt

A is the final amount of money in the account after a certain amount of time and at a certain interest rate.
P is the principal amount.
e = Natural Base
r is the interest rate in decimal form.
t is the time the amount of time the money is kept in the account.

or

A = P(r)n, where n is the time increment.

/

A = P(r)^t, where t is the value for time

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Answer 1 · 2018-07-24T12:40:03

#$1104.895#

Number of quarters in #5# years #=5\times 4=20#

Quarterly rate of compound interest #r=2/4=0.5%#

Initial amount #P=$ 1000#

hence the total amount after #5# years

#P(1+r/100)^n#

#=1000(1+0.5/100)^20#

#=1000(1.005)^{20}#

#=$1104.895#

Answer 2 · 2018-07-24T12:49:24

Final amount after #5# years is #$1,105#

Principal: #P=$1000# , rate of annual interest #r=2%#

compounded quarterly , time , #t= 5 # years

#:. r= 2/(4*100)= 1/200= 0.005 , t= 5*4=20#

Final amount : # A=P(1+r)^t or A=1000(1+0.005)^20#

or # A=1000(1+0.005)^20= 1000* 1.005^20~~ 1104.90# or

Final amount after #5# years is #$1,105# [Ans]