An investor deposits 5000 in an account that earns 3 interes

An investor deposits $5000 in an account that earns 3% interest compounded quarterly. Find the balance in the account after 10 years.

Solution

Compound interest formula:

Amount = Principal( 1+ rate/n)^n*t

n = compounding ; n= 4 t= 10 yrs ; rate = 3%

So, Amount = 5000( 1 + 0.03/4)^(10*4)

= 5000*(1.348)

= $6741.74 is the balance after 10 years