You place $5,000 in a bank account that earns an annual rate of 4.25%. If the interest is compounded quarterly, how much money will you have at the end of 5 years, assuming you neither deposit nor withdraw any money in this time?
Select one:
a. $6,156.73
b. $6,176.90
c. $6,183.83
d. $6,515.63

Question

You place $5,000 in a bank account that earns an annual rate of 4.25%. If the interest is compounded quarterly, how much money will you have at the end of 5 years, assuming you neither deposit nor withdraw any money in this time?
Select one:
a. $6,156.73
b. $6,176.90
c. $6,183.83
d. $6,515.63

anonymous · Answer

@cwrw238 @eliassaab

tbnrfrags · Answer

whats $$5,000\div4.25?$$

anonymous · Answer

1176.47?

tbnrfrags · Answer

yes, thats 4.25% of 5000 so whats next?

anonymous · Answer

Well if I multiply it by 5 I don't get any of the multiple choice answers...soooo what do I do next @TBNRfrags

tbnrfrags · Answer

it's paid out quarterly how often is that?

anonymous · Answer

4..

tbnrfrags · Answer

Your money gains interest quarterly in a year....4 times a year. But its for 5 years so 5 * 4 = 20. Your money accrues interest for 20 periods

anonymous · Answer

So what do I do

tbnrfrags · Answer

Your money gains interest quarterly in a year....4 times a year. But its for 5 years so 5 * 4 = 20. Your money accrues interest for 20 periods

anonymous · Answer

Okay so..what now :(

tbnrfrags · Answer

here i'll tell you the answer then you can try to figure out why thats the answer okay?

tbnrfrags · Answer

your answer is B

anonymous · Answer

$$
5000
   \left(1+\frac{0.0425}{4}\right)^{20}=6176
   .9

$$
B