SOLUTION: PLEASE CAN SOMEONE HELP ME WITH THIS, I'M HAVING A HARD TIME UNDERSTANDING FINANCE QUESTIONS. CAN YOU SHOW ME HOW TO DO THIS STEP BY STEP. I'D REALLY APPRECIATE IT. HAVE A BLESS

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Question 492885: PLEASE CAN SOMEONE HELP ME WITH THIS, I'M HAVING A HARD TIME UNDERSTANDING FINANCE QUESTIONS. CAN YOU SHOW ME HOW TO DO THIS STEP BY STEP. I'D REALLY APPRECIATE IT. HAVE A BLESS DAY!!
FIND THE ENDING BALANCE IN AN ACCOUNT THAT OPENS WITH $5,000, EARNS 4.5% INTEREST COMPOUNDED QUARTERLY, AND IS HELD FOR 20 YEARS. (ROUND YOUR ANSWER TO THE NEAREST CENT).
Answer by ankor@dixie-net.com(22740) (Show Source):
You can put this solution on YOUR website!
FIND THE ENDING BALANCE IN AN ACCOUNT THAT OPENS WITH $5,000, EARNS 4.5% INTEREST COMPOUNDED QUARTERLY, AND IS HELD FOR 20 YEAR
:
You should know the compound interest formula:
A = P*(1+)^nt
Where
A = resulting amt after t yrs
P = initial amt
r = interest rate in decimals
n = no. of time compounded per yr
t = time in yrs
:
In your problem we have
P = 5000
r = .045
n = 4
t = 20
:
A = 5000(1+)^(4*20)
A = 5000(1+.01125)^80
A = 5000(1.01125)^80
using a calc find 1.01125^80
A = 5000*2.447274977
A = $12,236.37