Given:
Principal = $3,500
Rate of interest = 7% compounded quarterly (4 times in an year)
Time = 6 years
To find:
The amount.
Solution:
The formula for the amount is
[tex]A=P\left(1+\dfrac{r}{n}\right)^{nt}[/tex]
Where, P is principal, r is rate of interest, n is number of times interest compounded in an year and t is number of years.
Putting P=3500, r=0.07, n=4 and t=6 in the above formula, we get
[tex]A=3500\left(1+\dfrac{0.07}{4}\right)^{(4)(6)}[/tex]
[tex]A=3500\left(1+0.0175\right)^{24}[/tex]
[tex]A=3500\left(1.0175\right)^{24}[/tex]
[tex]A=5307.54975[/tex]
[tex]A\approx 5307.55[/tex]
Therefore, the amount after 6 years is $5307.55.
