Question

11A couple invests $1200 in an account paying 10% interest compounded quarterly.How much is in the account after 1 year? *(2 Points)$1400O $1325$1300$135012

Answer 1

Let's use the compound interest formula:

$A=P(1+\frac{r}{n})^{nt}$

where:

A = Amount

P = Principal = $1200

r = interest rate = 10% = 0.1

t = time = 1

n = Number of times interest is compounded = 4

so:

$\begin{gathered} A=1200(1+\frac{0.1}{4})^4 \\ A\approx1325 \end{gathered}$

Answer:

$1325