Answer
(a) After six years, there will be \$4021.09 in the account.
(b) The interest earned is \$1521.09
Work Step by Step
(a) We can use this formula:
$A = P~(1+\frac{r}{n})^{nt}$
$A$ is the final amount in the account
$P$ is the principal (the amount of money invested)
$r$ is the interest rate
$n$ is the number of times per year the interest is compounded
$t$ is the number of years
$A = P~(1+\frac{r}{n})^{nt}$
$A = (\$2500)~(1+\frac{0.08}{4})^{(4)(6)}$
$A = \$4021.09$
After six years, there will be \$4021.09 in the account.
(b) We can find the interest earned.
$A - P = \$4021.09 - \$2500 = \$1521.09$
The interest earned is \$1521.09
