SOLUTION: The formula for calculating the amount of money returned for an initial deposit money into a bank account or CD (Certificate of Deposit) is given by A is the amount of returned

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Question 83314: The formula for calculating the amount of money returned for an initial deposit money into a bank account or CD (Certificate of Deposit) is given by

A is the amount of returned.
P is the principal amount initially deposited.
r is the annual interest rate (expressed as a decimal).
n is the compound period.
t is the number of years.
Carry all calculations to 6 decimals on all assignments then round the answer to the nearest cent.
Suppose you deposit $10,000 for 2 years at a rate of 10%.

Calculate the return (A) if the bank compounds quarterly (n = 4). Round your answer to the hundredth's place.
Answer by jim_thompson5910(35256) About Me  (Show Source):
You can put this solution on YOUR website!
Let p=10000, r=0.1, n=4, and t=2 and plug them into A=10000%281%2B0.1%2F4%29%5E%284%2A2%29

A=10000%281%2B0.1%2F4%29%5E%284%2A2%29 Start with the given expression
A=10000%281%2B0.025%29%5E%284%2A2%29 Divide 0.1 by 4 to get 0.025
A=10000%281%2B0.025%29%5E%288%29 Multiply the exponents 4 and 2 to get 8
A=10000%281.025%29%5E%288%29 Add 1 and 0.025 to get 1.025
A=10000%281.21840289750992%29 Raise 1.025 to 8 to get 1.21840289750992
A=12184.0289750992 Multiply 10000 and 1.21840289750992 to get 12184.0289750992

So the return is $12184.02