Question

Robyn invests $1500 at 4.85% compounded quarterly. Write an equation to represent the amount of money A she will have in tyears.

Answer 1

The amount of money A after t years, with a rate r, an initial investment P and a number of times n that the interest is compounded per year, is:

`A=P(1+(r)/(n))^(nt)`

If the initial investment is $1500, the rate is 4.85% anually compounded quarterly (n=4), then:

`\begin{gathered} A=1500(1+(4.85/100)/(4))^(4t) \\ =1500(1+(4.85)/(400))^(4t) \end{gathered}`

Therefore, the amount of money that she will have after t years, is:

`A=1500(1+(4.85)/(400))^(4t)`