9514 1404 393
Answer:
- $3050.48
- $3005.25
- total: $6055.73
Step-by-step explanation:
You are given enough information to be able to fill in the values in the compound interest formula:
A = P(1 +r/n)^(nt)
where P is the principal invested (2500), r is the annual interest rate, n is the number of times per year interest is compounded, and t is the number of years (5).
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For the first investment, r = .04 and n = 4. ("Quarterly" means interest is compounded 4 times per year.) The account balance after 5 years is then ...
A = 2500·(1 +.04/4)^(4·5) = 2500·1.01^20 ≈ 3050.48
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For the second investment, r = .0375 and n = 1. ("Annually" means interest is compounded 1 time per year.) The account balance after 5 years is then ...
A = 2500·(1 +.0375/1)^(1·5) = 2500·1.0375^5 ≈ 3005.25
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After 5 years, the first investment is worth $3050.48; the second investment is worth $3005.25. Together, their value is $6055.73.
