Question

Aaron puts $1,000 in an account that pays 10% interest compounded quarterly. He leaves it in the account for six months. Estimate how much interest he earns.

A. $50
B. $100
C. $150
D. $200

Answer 1

I think its C or D... idk hope it helps tho

Answer 2

Answer: . $50

Step-by-step explanation:

The formula to find the compound amount (compounded quarterly) is given by :-

$A=P(1+\dfrac{r}{4})^{4t}$, where P Is principal amount, r is the rate of interest in decimal and t is the time in years.

Given : Aaron puts $1,000 in an account that pays 10% interest compounded quarterly.

Then, P=1000, r=10%=0.1 ; t=$\dfrac{6}{12}=0.5$ year

Now, $A=1000(1+\dfrac{0.1}{4})^{4(0.5)}$

$A=1000(1.025)^{2}=1050.625$

Then , Compound interest=$A-P=1050.625-1000=50.625\approx\ 50$

Hence, he earns the estimated interest of $50.