Exponential Function

Question

Find the final amount of money in an account if $5,300is deposited at 5.5% interest compounded quarterly (every 3 months) and the money is left for 66 years. 

The final amount is $................(Round answer to 2 decimal places)

Answer 1

1.) Determine the correct equation to use:

P = P_°(1+r/n)

where P_° = the principal, r = the rate in decimal form, P = the new balance, n = the number of times it is compounded, r = the time in years

2.) Substitute in what we know.

P = 5300(1 + 0.055/4)⁴⁽⁶⁶⁾ = 194995.60