Solve the problem. Round your answer to the nearest cent.
-Andrea Gilford's savings account has a balance of $\$ 919$. After 6 years, what will the amount of interest be at $4 \%$ compounded quarterly?
A) $\$ 247.89$
B) $\$ 252.89$
C) $\$ 18.38$
D) $\$ 238.89$

Question

Quizplus · Accepted Answer

The formula for compound interest is $A = P(1 + \frac{r}{n})^{nt}$, 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. Here, $P = \$919$, $r = 4\% = 0.04$, $n = 4$ (since interest is compounded quarterly), and $t = 6$ years. Plugging these values into the formula gives us the total amount, and subtracting the principal from this gives the interest earned. The correct calculation leads to an interest amount of approximately \$247.89.

Solve the Problem $919\$ 919$919 After 6 Years, What Will the Amount of Interest

Solve the Problem $\$ 919$ After 6 Years, What Will the Amount of Interest