P = Po * (1+r)^n
r = (4%/4)/100% = 0.01 = Quarterly % rate expressed as a decimal.
n = 4Comp./yr. * 5yrs. = 20 Compounding
periods.
Solve for P.
2nd investment = P + $500 @ 5% for 5 yrs.
Joe and Susan invested $1500 at Bank of America in 2000, at 4% compounded quarterly. In the year 2005 they moved to another city and took the total money from their investment added $500 and invested in at Bank Bravo, at 5% compounded quarterly.
a) What is the value of this account now in 2010? Show all steps arriving to your answer.
b) What is the total amount of compound interest earned?
1 answer