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Tom deposits $2,000 into an account with an interest rate of 2.5% that is compounded quarterly. Rounding to the nearest dollar, what is the balance in Tom's account after 5 years?

Respuesta :

Answer:

The balance in Tom's account is = $ 2265.41

Step-by-step explanation:

Principal amount = $ 2000

Rate = 2.5 %

Time = 5 years

Since Amount is compounded quarterly so

New rate of interest = [tex]\frac{2.5}{4} = 0.625[/tex]

Time = 5 × 4 = 20 years

Now the amount in the account is given by

[tex]A = P (1+\frac{R}{100} )^{T}[/tex]

[tex]A = 2000 (1+\frac{0.625}{100} )^{20}[/tex]

A = $ 2265.41

Therefore the balance in Tom's account is = $ 2265.41

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