Question

if $800 are deposited into an account with a 6.5% interest rate, compounded quarterly, what is the balance after 5 years?
f = $?
f = p(1 + \frac{r}{n})^{nt}
round to the nearest cent.

Explanation:

Step1: Identify given values

$P = 800$, $r = 0.065$, $n = 4$, $t = 5$

Step2: Calculate periodic rate

$\frac{r}{n} = \frac{0.065}{4} = 0.01625$

Step3: Calculate total compound periods

$nt = 4 \times 5 = 20$

Step4: Substitute into compound formula

$F = 800(1 + 0.01625)^{20}$

Step5: Compute the final amount

First calculate $(1.01625)^{20} \approx 1.380419$, then $F = 800 \times 1.380419 \approx 1104.34$

Answer:

$1104.34$