SOLUTION: A savings account earns 4% annual interest compounded quarterly. How much interest would $500 earn if it was invested for one year?

Question 894744: A savings account earns 4% annual interest compounded quarterly. How much interest would $500 earn if it was invested for one year?
Found 2 solutions by Alan3354, stanbon:
Answer by Alan3354(69443) (Show Source): You can put this solution on YOUR website!
A savings account earns 4% annual interest compounded quarterly. How much interest would $500 earn if it was invested for one year?
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1 yr = 4 quarters
4%/yer = 1% per quarter
FV = PV*(1.01)^4
FV = 500*(1.01)^4 = $520.30
Interest = $20.30
Not very interesting
Answer by stanbon(75887) (Show Source): You can put this solution on YOUR website!
A savings account earns 4% annual interest compounded quarterly. How much interest would $500 earn if it was invested for one year?
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A(t) = P(1+(r/n))^(nt)
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A(1) = 500(1+0.04/4)^(4*1)
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A(1) = 500(1.01)^4
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A(1) = 500*1.0406
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A(1) = $520.30
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Interest = $20.30
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Cheers,
Stan H.
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