Question

Kendra is saving up money to buy a car. Kendra puts $5,371.00 into an account which earns 8.62% interest, compounded quarterly. How much will she have in the account after 4 years?
Use the formula A=P1+
r
n
nt, where A is the balance (final amount), P is the principal (starting amount), r is the interest rate expressed as a decimal, n is the number of times per year that the interest is compounded, and t is the time in years.
Round your answer to the nearest cent.

Answer 1

A = P(1 + r/n)^(nt) = 5371(1 + 0.0862/4)^(4·4)
= 5371(1.02155)^16 ≈ 5371(1.406545) ≈ $7,554.56

So after 4 years she will have about $7,554.56.