You deposit $400 into an account that pays 2% annual interest compounded quarterly.

Part a: Write an exponential model that describes the situation.

Part b: Determine the value of the account after 5 years. Round to two decimal places.

Question

Trevor Baxter

Mathematics

27 August, 17:16

You deposit $400 into an account that pays 2% annual interest compounded quarterly.

Part a: Write an exponential model that describes the situation.

Part b: Determine the value of the account after 5 years. Round to two decimal places.

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Answers (1)

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Joyce · Answer 1

A.

A = 400 (1 + (0.02) / 4) ^4t where t = number of years and A = amount after t years

simplifying that becomes

A = 400 (1.005) ^4t

b amount after 5 years is

400 (1.005) ^ (4*5) = 400 (1.005) ^20 = $ 441.96

You deposit $400 into an account that pays 2% annual interest compounded quarterly.Part a: Write an exponential model that describes the situation.Part b: Determine the value of the account after 5 years. Round to two decimal places.

You deposit $400 into an account that pays 2% annual interest compounded quarterly.

Part a: Write an exponential model that describes the situation.

Part b: Determine the value of the account after 5 years. Round to two decimal places.