Franklin opened a savings account and deposited 500.00 as principal. The account earns 8% interest, compounded quarterly. What is the balance after 3 years?

Solution

Solution

Amount : 634.12

Solution steps

Translate the problem into an equation:

A = 500 (1 + \frac{0.08}{4})^{4 \cdot 3}

500 (1 + \frac{0.08}{4})^{4 \cdot 3} = 634.12089 \dots

Round to the nearest hundredth:

634.12

Amount : 634.12

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