answer from each drop - down menu.\n500(1 + \\frac{0.015}{4})^{4t} models the balance in a savings…

answer from each drop - down menu.\n500(1 + \\frac{0.015}{4})^{4t} models the balance in a savings account.\nthe account had an initial balance of $500 and compounds at an interest rate of 1.50%.\nreset

answer from each drop - down menu.\n500(1 + \\frac{0.015}{4})^{4t} models the balance in a savings account.\nthe account had an initial balance of $500 and compounds at an interest rate of 1.50%.\nreset

Answer

Explanation:

Step1: Recall compound - interest formula

The compound - interest formula is $A = P(1+\frac{r}{n})^{nt}$, where $P$ is the principal amount (initial balance), $r$ is the annual interest rate (in decimal), $n$ is the number of times interest is compounded per year, and $t$ is the number of years. In the given formula $A = 500(1+\frac{0.015}{4})^{4t}$, we have $P = 500$, $r=0.015$ (or 1.5% as an annual interest rate), and $n = 4$.

Step2: Determine compounding frequency

Since $n = 4$, the interest is compounded 4 times a year. Compounding 4 times a year means it compounds quarterly.

Answer:

Quarterly