select the correct answer from each drop - down menu. the expression 1,000(1.0215)^4t represents the amount…

select the correct answer from each drop - down menu. the expression 1,000(1.0215)^4t represents the amount of money in an account after t years. the interest is compounded monthly, quarterly, semiannually, annually and the annual interest rate on the account is 2.15%.

select the correct answer from each drop - down menu. the expression 1,000(1.0215)^4t represents the amount of money in an account after t years. the interest is compounded monthly, quarterly, semiannually, annually and the annual interest rate on the account is 2.15%.

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, $r$ 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 $A = 1000(1.0215)^{4t}$, we can rewrite it in the form of the compound - interest formula. If we let $P = 1000$, and compare $(1+\frac{r}{n})^{nt}=(1.0215)^{4t}$.

Step2: Determine $n$

We know that $r = 0.0215$ (since $2.15%=0.0215$). If we assume $(1+\frac{r}{n})^{nt}=(1.0215)^{4t}$, then $n = 4$. When $n = 4$, interest is compounded quarterly.

Answer:

quarterly