SOLUTION: Ms. Williams invested $9500 in an account that earned interest at an annual rate of 8%, compounded quarterly. If Ms. Williams does not make any withdrawals or deposits, which of th

Algebra ->  Quadratic Equations and Parabolas -> SOLUTION: Ms. Williams invested $9500 in an account that earned interest at an annual rate of 8%, compounded quarterly. If Ms. Williams does not make any withdrawals or deposits, which of th      Log On


   

Question 935300: Ms. Williams invested $9500 in an account that earned interest at an annual rate of 8%, compounded quarterly. If Ms. Williams does not make any withdrawals or deposits, which of the following equations represents the amount of money, A, in dollars, in her account in 20 years?
a) A=9500(1.02)^2
b) A=9500(1.02)^80
c) A=9500(1.08)^20
d) A=9500(1.08)^80
Answer by MathLover1(20849) About Me  (Show Source):
You can put this solution on YOUR website!
Formula for compound interest:
A=P%281%2Bi%29%5En
A=amount at the end of n periods (future value)
P=amount invested (present value)
i=interest per compounding period,8% per year is equivalent to 2%=0.02 per 3 months (one quarter), the compounding period
n=number of periods which is 4 in one year

A=9500%281%2B0.02%29%5E%2820%2A4%29
A=9500%281.02%29%5E80
so, your answer is: b) A=9500%281.02%29%5E80