Answer: $742.97
Step-by-step explanation:
The ending balance (principal plus interest) is known an compound amount.
the formula to calculate the compound amount after t years compounding quarterly , is given by :-
[tex]A=P(1+\dfrac{r}{4})^{4t}[/tex]
, where r= rate of interest ( in decimal)
t= time ( in years)
P= Principal amount.
As per given , we have
P= $500
t= 5 years
r= 8%=0.08
Substitute theses values in the formula, we get
[tex]A=500(1+\dfrac{0.08}{4})^{4(5)}[/tex]
[tex]A=500(1+0.02)^{20}[/tex]
[tex]A=500(1.02)^{20}[/tex]
[tex]A=500(1.48594739598)[/tex]
[tex]A=742.97369799\approx742.97[/tex] [To the nearest cent]
Hence, the ending balance will be $742.97 at the end of 5 years.
