Question

7. $6,000 is invested in an account that earns 4.5% annual interest, compounded quarterly. What is the

value of the account after 8 years?

Answer 1

The value of account after 8 years is $8580

Explanation:

Given in question as :

The principal that invested in an account = $6,000

The annual interest rate compounded quarterly = 4.5%

Time period = 8 years

Now from compound Interest method for quarterly .

Amount = Principal
`( 1 + (Rate)/(4 * 100))^(4 * Time)`

Or,Amount = $6,000
`( 1 + (4.5)/(4 * 100))^(4 * 8)`

Or, Amount = $6,000 (1.430)

∴ Amount = $8580

Hence the value of account after 8 years is $8580 Answer