[tex] A=P(1+ \dfrac{r}{m})^{mt} [/tex]
This was the formula that was given.
A is the final amount, which is what we're solving for.
P is the original money amount, which is $5,000
r is the interest rate, which is 1%, or 0.01
m is the amount of times the interest is compounded per year. Since the interest is compounded quarterly, interested is compounded 4 times per year.
t is the time the money is in the bank, which is 2 years
That's all we need to solve the equation now
[tex] A=P(1+ \dfrac{r}{m})^{mt} [/tex]
[tex]=5000(1+ \dfrac{0.01}{4})^{4(2)} [/tex]
[tex] =5000(1.0025)^{8} [/tex]
[tex]\approx 5100.88[/tex]
That's your answer
Have an awesome day!
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