Question

Pedro deposited $7,350 into a savings account 21 years ago. The account has an interest rate of 4.5% and the balance is currently $18,810.67. How often does the interest compound?

a. daily

b. monthly

c. quarterly

d. annually

Answer 1

hug me ?

Answer 2

oh wait i already asked you i think

Answer 3

daily is divided by 365, monthly is divided how many months it says, quarterly you divide by 4, and annually you divide by 12.

Answer 4

So do you know what the formula is if you wanted to figure how much you would have if you already knew what it was compounded by?

Answer 5

i dont :(

Answer 6

okay the formula would be \[a=p(1+r/n)^{nt}\]

Answer 7

just pick a random one... like lets try quarterly.
\[a=7,350(1+.045/4)^{81}\]

Answer 8

Are you understanding?

Answer 9

so it would be daily?

Answer 10

If you did all the math and it come out to 7,350?

Answer 11

If so it would be correct.

Answer 12

thats what i got?

Answer 13

Then yes, it would be daily