If you invest $5,000 at 1.8 percent for 5 years, compounded quarterly, what is the amount in the

account at the end of 5 years?

A. $5,450

B. $5,469

C. $5,470

D. $5,560

Answer: C. $5,470

Step-by-step explanation:

We would apply the formula for determining compound interest which is expressed as

A = P (1 + r/n) ^nt

Where

A = total amount in the account at the end of t years

r represents the interest rate.

n represents the periodic interval at which it was compounded.

P represents the principal or initial amount deposited

From the information given,

P = $5000

r = 1.8% = 1.8/100 = 0.018

n = 4 because it was compounded 3 times in a year (12/4 = 3 times)

t = 5 years

Therefore,

A = 5000 (1 + 0.018/4) ^4 * 5

A = 5000 (1 + 0.0045) ^20

A = 5000 (1.0045) ^20

A = $5470 to the nearest whole number