Tracy puts 5,000.00 into an account to use for school expenses. The account earns 12% interest, compounded quarterly. How much will be in the account after 4 years?

Solution

Tracy puts 5, 000.00 into an account to use for school expenses. The account earns 12% interest, compounded quarterly. How much will be in the account after 4 years?

Solution

Amount : 8023.53

Solution steps

Translate the problem into an equation:

A = 5000 (1 + \frac{0.12}{4})^{4 \cdot 4}

5000 (1 + \frac{0.12}{4})^{4 \cdot 4} = 8023.53219 \dots

Round to the nearest hundredth:

8023.53

Amount : 8023.53

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