Thomas opened a savings account with an annual interest rate of 7% and an initial deposit of $5000. If his interest is compounded quarterly, how much is in Thomas’s account after 4 years? Round your answer to the nearest cent.
According to the formula on this page, http://www.1728.org/compint3.htm the compounded interest total must equal: Total = Principal * (1 + rate/n)^n*years where "n" is the number of compounding periods per year. So for quarterly compounding, n = 4. Total = 5,000 * (1+(.07/4))^4*years Total = 5,000 * (1.0175)^16 Total = 6599.64675604 and rounding to nearest cent: Total = 6,599.65