Question

You have deposited $800 in a savings account, which pays three percent interest compounded quarterly. Find the amount in the account for 5 years

Answer 1

$928.95
You take $800 and multiply it by 0.0075 which is 1/4 of 3% since there are 4 quarters per year. Every time you multiply it you add the previous number and you have to do this 20 times since there are 20 quarters in 5 years. For example, 800 x 0.0075 = 6 + 800 = 806 x 0.0075 = 6.045 + 806 = 812.045 x 0.0075 = 6.0903375 + 812.045 = 818.1353375 and you just keep doing thing until you reach your total amount of quarters. Then you just round your decimal point to the hundredth place.