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Angelo Larragu's savings account has a principal of 800. It earns 6 percent interest compounded quarterly. What is the amount in the account at the end of the second quarter? How much is the compound interest?
The formula to use is as follows: \[A=P(1+\frac{0.06}{4})^{2}\] where A is the amount at the end of the second quarter and P is the principal. When you have found A, the amount at the end of the second quarter, subtract the principal from A to find the compound interest.
I'm sorry,but I still do not understand.
http://qrc.depaul.edu/StudyGuide2009/Notes/Savings%20Accounts/Compound%20Interest.htm \[\LARGE A=P(1+\frac{r}{n})^{nt}\] P = principal amount (the initial amount you borrow or deposit) r = annual rate of interest (as a decimal) t = number of years the amount is deposited or borrowed for. A = amount of money accumulated after n years, including interest. n = number of times the interest is compounded per year For you: P = 800 r = 0.06 t = 0.5 n = 4 \[\LARGE A=800(1+\frac{0.06}{4})^{4*0.5} = 800(1+\frac{0.06}{4})^{2}\]
A = the amount in the account at the end of the second quarter. A-P = compound interest