Question

Lorena invests $6,300 in an account that earns an annual interest rate of 5.3% compounded quarterly.What is the value of Lorena's investment after 2 years?

Answer 1

The principal is given 6300 dollar at an annual interest rate of 5.3 percent compounded quarterly.

To calculate the amount after 2 years.

`A=P(1+(R)/(N))^T`
`A=6300(1+(0.053)/(4))^(2*4)`
`A=6300(1.01325)^8=6999.6`

The value of Lorenas investemnt after 2 years is approx. 7000 dollar.