Answered

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Tom Blasting invested $4,500 in an investment paying 8% compounded quarterly for 3 years. Find the interest

Sagot :

Remember that

The compound interest formula is equal to

[tex]A=P(1+\frac{r}{n})^{nt}[/tex]

where

A is the Final Investment Value

P is the Principal amount of money to be invested

r is the rate of interest  in decimal

t is Number of Time Periods

n is the number of times interest is compounded per year

In this problem we have

P=$4,500

r=8%=0.08

n=4

t=3 years

substitute the given values in the formula

[tex]A=4,500(1+\frac{0.08}{4})^{4\cdot3}[/tex][tex]\begin{gathered} A=4,500(1.02)^{12} \\ A=\$5,707.09 \end{gathered}[/tex]

Find out the interest

I=A-P

I=5,707.09-4,500

I=$1,207.09

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