Question

your bank offers a savings account that pays 3.75% interest, compounded quarterly. how much will $500 invested today be worth at the end of 20 years? g

Answer 1

The message claims that $500 invested today will be worth $518.7 after 20 years.

What do we mean by interest?

Interest is a cost you incur when borrowing money and when lending money. Interests often is expressed as a daily percentage of the borrowed amount. These percentage represents the loan's interest rate. There are three types in interest: simple (normal) interest, interest earned, & compound interest.

Briefing:

Annual compounding of compound interest formula:

amount=P(1+($\frac{R}{100}$)ⁿ

Substitute P = $500 , R = 3.75% and n = 20

amount=500*(1+$\frac{3.75}{100}$)²⁰

            =500*($\frac{103.75}{100}$)²⁰

             =518.7

To know more about interest visit:

brainly.com/question/29480777

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