+0  
 
0
31
2
avatar+257 

When Lauren was born on January 1, 1990, her grandparents put $1000 in a savings account in her name. The account earned 7.5\% annual interest compounded quarterly on March 1, June 1, September 1 and December 1. To the nearest dollar, how much money was in her account when she turns two?

 

 

Thanks!

Sort: 

2+0 Answers

 #1
avatar+79819 
+1

There will be 8 compounding periods....since the compounding is quarterly, the effective interest rate  is (.075/4)....so we have

 

 

A  =  P ( 1 + i/4)^(n * t)     

 

Where  P = 1000, i  = .075, n = 4 and t  = 2      ......so.....

 

A  = 1000 ( 1 + .075/4)^8  =  $1160

 

 

cool cool cool

CPhill  Dec 1, 2017
edited by CPhill  Dec 1, 2017
 #2
avatar+257 
0

(☞゚∀゚)☞


3 Online Users

We use cookies to personalise content and ads, to provide social media features and to analyse our traffic. We also share information about your use of our site with our social media, advertising and analytics partners.  See details