Answer:
A) $3,382.73
B) $82.73
Step-by-step explanation:
We'll use the simple interest formula to solve this. Remember that this formula is:
[tex]A=P(1+r)^n[/tex]
Where:
• A, is the final amount after the investment
,
• P ,is the amount invested initially
,
• r, is the interest rate as a decimal
,
• n, is the times that the interest is compounded
Now, let's turn the annual interest into a quarterly interest by dividing the annual interest by 4:
[tex]1.24\%\rightarrow0.0124\rightarrow\frac{0.0124}{4}\rightarrow0.0031[/tex]
We'll have that:
[tex]r=0.0031[/tex]
Now, since there are 4 quarters in a year, and the investment is made for 2 years, we'll have that:
[tex]n=8[/tex]
Plugging in this data in the formula, and with the $3,300 principal, we'll have that:
[tex]\begin{gathered} A=3300(1+0.0031)^8 \\ \rightarrow A=3382.73 \end{gathered}[/tex]
To calcuate the interest earned, we substract the principal from this final amount as following:
[tex]3382.73-3300=82.73[/tex]
