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.

Question

anonymous · Answer

help me please!

kropot72 · Answer

$$\large A=P(1+\frac{r}{n})^{nt}$$
where A is the amount of the principal P after t years, r is the annual interest rate as a decimal fraction and n is the number of compounding periods per year.

Do you follow so far?

anonymous · Answer

yes, i'm following you.

kropot72 · Answer

Good. Can you now plug the given values into the equation and post the result?

anonymous · Answer

i'm having some trouble doing this...

kropot72 · Answer

What part are you having trouble with?

anonymous · Answer

plugging the numbers and such in...

kropot72 · Answer

Well I'll plug them in for you, and hopefully you'll see that its not very difficult.
$$\large A=1000(1+\frac{0.02}{4})^{(4\times5)}$$

anonymous · Answer

thank you!

kropot72 · Answer

You're welcome :)

anonymous · Answer

:)