Compound Interest questions Algebra 1

Question

You invest $500 in an account that has a annual interest rate of 5%, compounded quarterly for four years. How many times will the money be compounded?

Answer 1

Formula for the amount of money in account in “y” years:

A = $500(1 + 0.05/4)^4y

A - money in the account

y - number of full years

Calculating the amount of money in the account in 4 years:

A = $500(1 + 0.05/4)^4•4 ≅ $609.95

Money will be compounded 16 times: each quarter of the year.

Answer 2

four times a year for four years

how many time is that?