Answer:
$2122.17 (correct to the nearest cent).
Explanation:
To find the amount after 5 years, we use the compound interest formula below:
[tex]\begin{gathered} A=P(1+\frac{i}{k})^{nk} \\ \text{Principal, P}=1500 \\ Interest\text{ Rate, i =7\%} \\ \text{Period, k=4 (Quarterly)} \\ \text{Number of years, n=5} \end{gathered}[/tex]Substitute the given values:
[tex]\begin{gathered} A=1500(1+\frac{0.07}{4})^{4\times5} \\ =1500(1+0.0175)^{20} \\ =1500(1.0175)^{20} \\ =\$2122.17 \end{gathered}[/tex]After 5 years, you will have $2122.17 (correct to the nearest cent).
