Compound Interest. Use the compound interest formula from Example for Exercise. Round to t...

Compound Interest. Use the compound interest formula from Example for Exercise. Round to the nearest cent.

Suppose that $4100 is invested at 2.3%, compounded quarterly. How much is in the account at the end of 6 years?

EXAMPLE Compound Interest. If a principal P is invested at an interest rate r, compounded n times per year, in t years it will grow to an amount A given by

Suppose that $1250 is invested at 4.6% interest, compounded quarterly. How much is in the account at the end of 8 years?

Solution We have P = 1250, r = 4.6%, or 0.046, n = 4, and t = 8. Substituting, we find that the amount in the account at the end of 8 years is given by

Next, we evaluate this expression:

The amount in the account at the end of 8 years is $1802.26. The TVM SOLVER option in the FINANCE APP on a graphing calculator can be used to do this computation.