Ben opened a savings account and deposited 400.00 as principal. The account earns 12% interest, compounded quarterly. What is the balance after 2 years?

Solution

Solution

Amount : 506.71

Solution steps

Translate the problem into an equation:

A = 400 (1 + \frac{0.12}{4})^{4 \cdot 2}

400 (1 + \frac{0.12}{4})^{4 \cdot 2} = 506.70803 \dots

Round to the nearest hundredth:

506.71

Amount : 506.71

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