Violet deposits $800 every quarter into an account earning an annual interest rate of 4.5% compounded quarterly. How much would she have in the account after 10 years, to the nearest dollar?

Answer 1

To calculate the amount of money Violet would have in the account after 10 years, we can use the formula for compound interest:

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

Where:
A = the future value of the investment/loan, including interest
P = the principal investment amount (the initial deposit or loan amount)
r = the annual interest rate (decimal)
n = the number of times that interest is compounded per year
t = the number of years the money is invested or borrowed for

In this case:
P = $800
r = 4.5% or 0.045
n = 4 (quarterly compounding)
t = 10 years

A = $800(1 + 0.045/4)^(4*10)
A = $800(1 + 0.01125)^40
A = $800(1.01125)^40
A = $800(1.5361)
A = $1,228.88

Therefore, Violet would have approximately $1,228 in the account after 10 years, to the nearest dollar.