A deposit of 1000 is made in a bank account pays 24 interest

A deposit of $1000 is made in a bank account pays 24% interest per year compounded quarterly. Approximately how much money will be in the account after 10 years? 1.$7000 2.$7200 3.$8600 4.$10,000

Solution

Principal = $1000

Interest = 24% = 0.24

compunded quarterly = 0.24/4 = 0.06

time = 10yrs

Amount after 10yrs: Amount= P( 1+r/n)^(n*t)

= 1000( 1+ 0.06)^40

= $ 10285. 71

Approximately $10,000

Option 4