00:01
So to solve this, we'll just have to use the compound interest formula, which is a or the final amount is equivalent to the initial principal amount or p multiplied by 1 plus r or the interest rate over the number of times the interest applied per time period.
00:22
We have n, right it as n, to the power of, raise to the power of n multiplied by t.
00:29
P is the number of time periods that has elapsed.
00:33
So this is the formula that we will use, and we are given in the problem, the principal amount, the rate, which is 9 .5%, and the number of times the interest is applied per time period is 4 because it is quarterly.
00:51
So the time elapse would be 8.
00:54
So to find a, we'll just have to substitute the given values.
01:01
We have the principal amount, which is $7 ,400, multiplied by 1 plus the interest rate is 9 .5%.
01:11
So let's divide 9 .5 divided by 100, so that the percentage will be.
01:17
I mean the percent will be converted into decimal form and we will arrive to 0 .0...