# You deposited $2000 into a college savings account 5 years ago. if the account pays 2.5% annual interest, compounded quarterly, how do you find the current balance of the savings account? please show work thank you ! (=?

##### 1 Answer

Oct 13, 2015

#### Explanation:

This can be solved using compound interest formula

p = principle interest

r = annual interest

n = number of times interest is compounded per year

t = number of years the amount is deposited or borrowed for

A = Amount after n years including balance

Here,

p = 2000

r = 2.5 / 100 = 0.025

n = 4

t = 5

so,