Question

1.
Find the compound amount. Round to the nearest cent.

Amount: $10,500
Rate: 6%
Compounded: quarterly
Time (Years): 5


A.)$14,142.03

B.)$14,051.42

C.)$11,311.44

D.)$11,287.50

Answer 1

Principal Amount = P = $10,500
Interest rate = r= 6% = 0.06
Time in years = t = 5
Compounding periods in a year = n = 4
Compounded Amount = A = ?

The formula for compound interest is:

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

Using the values, we get:

$A=10500(1+ \frac{0.06}{4})^{4*5}=14141.98$

Option A gives the most closest value and hence is the correct answer.