SOLUTION: $24,000 is deposited for 5 years in an account earning 7% interest. (Round your answers to two decimal places.)
Calculate the interest earned if interest is compounded quarterly
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Question 1134286: $24,000 is deposited for 5 years in an account earning 7% interest. (Round your answers to two decimal places.)
Calculate the interest earned if interest is compounded quarterly.
Answer by greenestamps(13200) (Show Source): You can put this solution on YOUR website!
The annual interest rate is 7%; the quarterly interest rate is one-fourth of that, 1.75%.
Each quarter, the value of the account increases by 1.75%; the growth factor is 1+.0175 = 1.0175.
5 years is 5*4=20 quarters; the growth factor gets applied 20 times. The value at the end of 5 years is
Use a calculator.
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