Carter Company has a bank account earning interest at 8% per annum, compounded quarterly. If $100,000 is deposited on day one what will be the balance in the account after five years if interest is reinvested? (round answer to the nearest whole dollar)
Added by Montserrat T.
Step 1
- Principal (P) = $100,000 - Annual interest rate (r) = 8% or 0.08 - Compounding frequency (n) = quarterly, which means 4 times a year - Time (t) = 5 years The formula for compound interest is: \[ A = P \left(1 + \frac{r}{n}\right)^{nt} \] Show more…
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