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# I need the balance of \$2,500 principal earnings with 4% compounded quarterly, after 4 years the balance is?

answers are:   a) \$2,931.45    b) \$2,924.65     c) \$41,600.00     d) \$40,000.00

### 2 Answers by Expert Tutors

Philip P. | Effective and Affordable Math TutorEffective and Affordable Math Tutor
5.0 5.0 (430 lesson ratings) (430)
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The formula is:

A = P(1 + r/n)nt

Where:
A = the ending balance
P = the principle or initial balance = \$2500
r = annual interest rate expressed as a decimal value = 4% = 0.04
n = number of compoundings per year = quarterly = 4

A = (\$2500)(1 + 0.04/4)4*4

A = (\$2500)(1.01)16

Can you finish it from here?
Olivia B. | Mathematics tutor-- ALL levels!Mathematics tutor-- ALL levels!
5.0 5.0 (135 lesson ratings) (135)
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The formula for discrete compounding (non-continuous) is given by:

A = P*(1+ r/n)n*t,

where P:  Principle amount
r:  rate
n:  times per year you compound
t:  number of years

Therefore, plugging in the info from the problem you stated, we have:

A = (2500)*(1+.04/4)4*4
= 2931.45