Question

If Sheena invests 5000 in a savings account that pays 6% interest, compounded
quarterly, how much does the account hold at the end of 1 year?​

Answer 1

Given:

• Principal (p) = 5000
• Rate (r) = 6%
• Time (t) = 1 year

To Find:

• Amount After 1 year?

Formula Used:

$\\ \bigstar{\underline{\boxed{\tt\green\large{ Amount = p(1 + \dfrac{r}{100} )^{t} }}}}$

Where

• A = Amount
• r = Rate
• p = principal
• t = Time

Solution:

Rate Compounded Quarterly,

so,

r/4 $\implies$ 6/4 $\implies$ 3/2

There is a Four (4) Quarters in One Year.

After substituting values,

$\implies$ A = P(1 + r/100)ⁿ

$\implies$ A = 5000(1 + 3/200)⁴

$\implies$ A = 5000( 203/200)⁴

$\implies$ A = 5000 × 203/200 × 203/200 × 203/200 × 203/200

$\implies$ A = 5000 × 1.01 × 1.01 × 1.01 × 1.01

$\implies$ A = ₹ 5050

Hence,

• At the end of One Year, Account have ₹5050 (approx.)