Find the amount accumulated after investing a principal P for t years at an interest rate r.
-P = $4511, t = 5 , r = 7.3% , compounded quarterly (k = 4)
A) $6456.04
B) $6416.10
C) $6476.81
D) $6490.98

Question

Quizplus · Accepted Answer

The formula for compound interest is A = P(1 + r/n)^(nt), where A is the amount of money accumulated after n years, including interest, P is the principal amount, 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. Here, P = $4511, r = 7.3% or 0.073, n = 4 (since the interest is compounded quarterly), and t = 5 years. Plugging these values into the formula gives A = 4511(1 + 0.073/4)^(4*5) = $6476.81.

Find the Amount Accumulated After Investing a Principal P for T