Brenda savings account principal 850, 5.5% annual interest rate and is compounded quarterly for 1 year. what is the compound interest?

A = $ 861.69

Equation:

A = P (1 + rt)

Calculation:

First, converting R percent to r a decimal

r = R/100 = 5.5%/100 = 0.055 per year,

putting time into years for simplicity,

1 quarters : 4 quarters/year = 0.25 years,

then, solving our equation

A = 850 (1 + (0.055 * 0.25)) = 861.6875

A = $ 861.69

The total amount accrued, principal plus interest,

from simple interest on a principal of $ 850.00

at a rate of 5.5% per year

for 0.25 years (1 quarters) is $ 861.69.