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You deposit 2000 in an account that pays

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you deposit $2000 in an account that pays 3% annual interest. Find the balance after 10 years if the

Discussion in 'Calculator Requests' started by math_celebrity, Jan 28, 2022.

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  1. You deposit 2000 in an account that pays

    math_celebrity Administrator Staff Member

    you deposit $2000 in an account that pays 3% annual interest. Find the balance after 10 years if the interest is compounded quarterly. Please give your answer to 2 decimal places.

    Using our compound interest calculator, with 10 * 4 = 40 quarters, we have:
    $2,696.70

    math_celebrity, Jan 28, 2022

    #1


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You deposit 2000 in an account that pays

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Question:

You deposit $2,000 in a savings account that pays 10 percent interest, compounded annually. How much will your account be worth in 15 years?

A. $2,030.21

B. $5,000.00

C. $8,091.12

D. $8,354.50

E. $9,020.10

Compounding Interest:

The compounding interest refers to a method to calculate the interest earned on an interest-bearing asset. This method assumes that received interests are reinvested in the same assets. Consequently, there will be additional interest earnings on original interests.

Answer and Explanation: 1

The answer is D. $8,354.50

Given information:

  • Initial deposit = $2,000
  • N = 15
  • I = 10%

Determine the account balance after 15 years:

{eq}Balance =...

See full answer below.

Learn more about this topic:

You deposit 2000 in an account that pays

Compounding Interest Formulas: Calculations & Examples

from

Chapter 16 / Lesson 8

What is compound interest? See how the compound interest formula is used in daily, monthly, quarterly, and annual compound interest example calculations.

Related to this Question

Explore our homework questions and answers library


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Question 76388: you deposit $2000 in an account that pays 2% annual interest compounded quarterly. How long will it take for the balance to reach $2400?
I have having trouble completing this problem, please help with the steps.
Tx, H
Found 2 solutions by stanbon, Edwin McCravy:
Answer by stanbon(75887)
You deposit 2000 in an account that pays
 
You deposit 2000 in an account that pays
 
You deposit 2000 in an account that pays
(Show Source):

You can put this solution on YOUR website!
you deposit $2000 in an account that pays 2% annual interest compounded quarterly. How long will it take for the balance to reach $2400?
----------
Formula: A = P(1 + r/n)^(nt)
2400 = 2000(1 + 0.02/4)^(4t)
1.2 = 1.005^(4t)
Take the log of both sides to get:
log(1.2) = 4tlog(1.005)
4t = log(1.2)/log(1.005)
4t=36.56
t=9.14 years.
==============
Cheers,
Stan H.


Answer by Edwin McCravy(19211)
You deposit 2000 in an account that pays
 
You deposit 2000 in an account that pays
  (Show Source):

You can put this solution on YOUR website!


you deposit $2000 in an account that pays 2% annual
interest compounded quarterly.  How long will it 
take for the balance to reach $2400?

I have having trouble completing this problem, 
please help with the steps.

Tx, H




where

A = final amount
P = beginning amount
r = annual interest rate expressed as a decimal
n = number of times a year interest is compounded
t = number of years.

In this problem

A = $2400
P = $2000
r = .02
n = 4 (quarterly)
t = unknown

Substituting:




You deposit 2000 in an account that pays




Divide both sides by 2000





take the natural log of both sides:



Use the rule of logarthims  on the
right hand side:



Divide both sides by 





Get your calculator and work out the left sides;



At the end of 9 years, the balance will be $2393.36
which is short of $2400 by $6.64, then on the next
compounding 3 months later, the balance will be 
$2408.34, which is over $2400 by $8.34.  The balance
won't ever reach $2400 exactly, but the first time 
it will exceed $2400 will be 9 years and 3 months.

Edwin

deposit account pays

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