Two thousand dollars is invested at 5.5 percent interest compounded
quarterly for 2 years. Then the amount is $ 2230.88
Solution:
Given that Two thousand dollars is invested at 5.5 percent interest compounded quarterly for 2 years
The formula for amount using compounded quarterly is given as:
[tex]\text { Amount }=P\left(1+\frac{R / 4}{100}\right)^{4 T}[/tex]
Where, "p" is the principal sum
"R" is the rate of interest
"T" is the number of years
Here in this problem,
P = 2000 ; R = 5.5 ; T = 2 years
Plugging in values in formula we get,
[tex]\text {Amount}=2000\left(1+\frac{\frac{5.5}{4}}{100}\right)^{4 \times 2}[/tex]
[tex]=2000\left(1+\frac{1.375}{100}\right)^{8}[/tex]
On solving we get,
[tex]=2000(1+0.01375)^{8}=2000(1.11544)=2230.88[/tex]
Hence the amount is $ 2230.88
