A $20,000 deposit was placed in a bank paying 5.75% interest compounded quarterly. After 12 months, how much interest was earned?

After 1 year, the bank paid (5.75/4) percent, 4 times.
The value of the investment is (20,000) times (1 + 0.0575/4) to the 4th power.
(1 + 0.0575/4) = 1.014375
That number to the 4th power is 1.05875... (rounded)
The interest alone is (20,000) times (0.05875...) = $1,175.04

Answered by AL2006 | 2024-06-10

P = 20,000 \\ R = 5.75 \\ T = 1 \\ I = \frac{PRT}{100} \\ = \frac{20000 * 5.75*1}{100} \\ = 115000/100 \\ = 1150 $

Answered by tadvisohil886 | 2024-06-10

The interest earned on a $20,000 deposit at a 5.75% interest rate compounded quarterly over 12 months is approximately $1,172.58. This is calculated using the compound interest formula. Subtracting the principal from the final amount gives the total interest earned.
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Answered by AL2006 | 2024-11-12