.Jim opened an account with $400. The account pays three percent quarterly. How much is in the account at the end of two years? Round to the nearest dollar

Question

lgbasallote · Answer

i believe you apply the formula  I = Prt

anonymous · Answer

Really ?? @lgbasallote

valpey · Answer

There is a bit of a semantic bug here when you say "three percent quarterly". It could mean 3% is added each quarter or it could be 3% annual interest compounded quarterly.

anonymous · Answer

two years is 8 quarters 
Assuming simple interest, 

A = P(1+rt) 
= 400(1+8*.03) 
= 496

lgbasallote · Answer

idk..like i said i believe lol

lgbasallote · Answer

i didnt say it was ;) hehe

valpey · Answer

For the first case we have:
$$A=P(1+r)^{nt}$$
For the second case we have:
$$A=P(1+\frac{r}{n})^{nt}$$

anonymous · Answer

its the second one.

valpey · Answer

In both of these examples, t is the number of years and n is the number of periods per year. P is the beginning principal, and A is the Accumulated total. r is the interest rate.

anonymous · Answer

it is a good question
3% each quarter, or a rate of 3% compounded quarterly
the first is a more accurate reading of the words
the second is more accurate reading of real life

valpey · Answer

Most textbooks are careful to differentiate, but some question writers get sloppy.

valpey · Answer

I would assume the second one.