Answer: the investment would be
$110.45
Step-by-step explanation:
Initial amount deposited into the account is $100 This means that the principal is
P = 100
It was compounded quarterly. This means that it was compounded 4 times in a year. So
n = 4
The rate at which the principal was compounded is 5%. So
r = 5/100 = 0.05
It was compounded for 2 years. So
t = 2
The formula for compound interest is
A = P(1+r/n)^nt
A = total amount in the account at the end of t years. Therefore
A = 100 (1+0.05/4)^4×2
A = 100 (1.0125)^8
A = $110.45
