Algebra-1

1. Use the compound interest formula for quarterly compounding:

The formula is , where:

 is the amount of money accumulated after  years, including interest.

 is the principal amount (the initial investment). Here, .

 is the annual interest rate (in decimal form). Given  (5% annual interest rate).

 is the number of times interest is compounded per year. Since it's compounded quarterly, .

 is the number of years. Here, .

2. Substitute the values into the formula:

Calculate the value inside the parentheses: , then

Click "Show Answer" to reveal the answer and analysis