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Sagot :
Loretta deposited $350 in a savings account with the 4.5% interest compounded quarterly. The amount at the end of 7 years will be $ 478.75.
Given,
Principal (P) = $350
Number of years (t) = 7
Interest rate (r) = 4.5 % or 0.045
We know that, compounded quarterly means interest is calculated four times in an year. The interest for 7 years will be 4 times the number of years. Here,
the number of compounding per year (n) = 4
so, for 7 years = 4*7 = 28
We know that compound interest is calculated as:
A = P{1+(r/n)}^nt
A= 350 {1+(0.045 /4)}^(4)(7)
A= 350 (1+0.01125)^28
A= 350 (1.01125)^28
A= 478.748 or 478.75
The interest (I) for will be ,
I = A-P = 478.75-350= $128.75
So, we can say that, when Loretta deposits $350 at 4.5% interest compounded quarterly, the amount at the end of 7 years will be $ 478.75.
To know more about Compound interest,
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