We use cookies to personalise content and advertisements and to analyse access to our website. Furthermore, our partners for online advertising receive pseudonymised information about your use of our website. cookie policy and privacy policy.

+0

# Algebra

0
439
1
How do I calculate the balance in the account after 5 years if the interest is compounded quarterly? The principal is 2000 at 2% annual interest rate.
Mar 15, 2014

### Best Answer

#1
+8
Use this formula to calculate the amount at the end of five years:

A = P(1 + R/T)^(NT).........

Where
P = principal amount (the initial amount you borrow or deposit)

R = annual rate of interest (as a decimal)

T = number of years the amount is deposited or borrowed for.

A = amount of money accumulated after N years, including interest.

N = number of times the interest is compounded per year

So, using your info, we have,

A = 2000(1 + .02/4)^(4*5)

A = 2000*(1.005)^(20)

Remember to do the exponent first, and you should be able to take it from there!!

Hope this helps
Mar 15, 2014

### 1+0 Answers

#1
+8
Best AnswerUse this formula to calculate the amount at the end of five years:

A = P(1 + R/T)^(NT).........

Where
P = principal amount (the initial amount you borrow or deposit)

R = annual rate of interest (as a decimal)

T = number of years the amount is deposited or borrowed for.

A = amount of money accumulated after N years, including interest.

N = number of times the interest is compounded per year

So, using your info, we have,

A = 2000(1 + .02/4)^(4*5)

A = 2000*(1.005)^(20)

Remember to do the exponent first, and you should be able to take it from there!!

Hope this helps
CPhill Mar 15, 2014