If on the first of January a savings account has a balance of $3, 200, what amou

Question

If on the first of January a savings account has a balance of $3, 200, what amount will he in this account after three years if the bank gives 6% per year interest compounded quarterly? (Assume that there are no deposits or withdrawals of money during these three years.) Answer___Find the amount after one year on $1,000 invested at 6% per year if interest is simple interest. Answer___compound interest compounded quarterly Answer___Suppose that the population of a town increases by 3% each year. The population of the town today is 25,000. Use the compound interest table to find its population ten years from now. Give the answer to the nearest thousand.

Explanation / Answer

18) balance in accout = $ 3200

time = 3 years

rate of interest = 6%

applying compounded quarterly formula

A = P ( 1+r/n )^ nt

n = 4 for quarterly

plugging the values in the formula and solving

A = 3200 ( 1 + .06/4)^4*3

A = $ 3825.98

19) amount invested = $ 1000

rate of interest = 6%

time = 1 yr

simple interest : P*R*T = 1000*.06*1 = 60

hence, amout would be 1000+60 = $ 1060

b) compounded quarterly

A = 1000 ( 1+ .06/4)^4 = $1061.36

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