Solve the problem.
-An initial investment of $12,000 is appreciated for 2 years in an account that earns 5% interest, compounded quarterly. Find the amount of money in the account at the end of the period.
A)$1253.83
B)$13,253.83
C)$13,230.00
D)$13,090.21

Question

Quizplus · Accepted Answer

The amount of money in the account at the end of the period can be found using the formula for compound interest: A = P(1 + r/n)^(nt), where A is the amount of money accumulated after n years, including interest, P is the principal amount (the initial amount of money), r is the annual interest rate (decimal), n is the number of times that interest is compounded per year, and t is the time the money is invested for in years. Plugging in the given values: A = $12,000(1 + 0.05/4)^(4*2) = $12,000(1 + 0.0125)^(8) = $12,000(1.0125)^(8) ≈ $13,253.83.

Solve the Problem. -An Initial Investment of $12,000 Is Appreciated for 2 Years