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Question 1098352: For her 3rd birthday Alice's parents invested $5,000.00 in a 13-year certificate for her that pays 7% compounded quarterly. How much is the certificate worth on Alice's 16 birthday? Round your answer to 2 decimal places and separate the thousands by a comma.
Answer by ankor@dixie-net.com(22740)   (Show Source):
You can put this solution on YOUR website! For her 3rd birthday Alice's parents invested $5,000.00 in a 13-year certificate for her that pays 7% compounded quarterly.
How much is the certificate worth on Alice's 16 birthday?
Round your answer to 2 decimal places
: Using the formula: A = Ao(1+(r/n))^(nt), where:
A = the resulting amt after t time
Ao - initial amt
r = interest rate in decimal form
n = compounding times per year
t = time in years
:
Ao=$5000; n=4 (quarterly); t= 13 yrs
A = 5000(1 + .07/4))^(4*13)
A = 5000(1.0175)^52
Using your calc
A = 5000*2.4648
A = $12,324.23 in 13 yrs, 7% compounded quarterly on her 16th birthday
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