If 8000 dollars is invested in a bank account at an interest rate of 10 per cent per year, find the amount in the bank after 15 years if interests is compounded quarterly

Answer 1

To find the amount in the bank after 15 years with quarterly compounding, we use the formula for compound interest:

A = P(1 + r/n)^(nt)

Where:
A = the final amount in the bank account
P = the principal amount (initial investment)
r = annual interest rate (as a decimal)
n = number of compounding periods per year
t = number of years

In this case:
P = $8000
r = 10% = 0.10
n = 4 (quarterly compounding)
t = 15 years

Plugging in these values into the formula, we have:

A = 8000(1 + 0.10/4)^(4*15)
A = 8000(1 + 0.025)^(60)
A = 8000(1.025)^(60)

Calculating this, we get:

A ≈ $31533.28

So, the amount in the bank after 15 years with quarterly compounding would be approximately $31,533.28.