Acustomer deposits $2000 in a savings account that pays 5.2% interest compounded quarterly. how much money will the customer have in the account after 2 yr? after 5 yr?

To solve this we are going to use the compound interest formula: 

where
is the amount after  years 
is the initial amount 
is the interest rate in decimal form 
is the number of times the interest is compounded per year
is the time in years.

First, we are going to convert the interest rate to decimal form by divide the rate by 100%:

Next, we are going to find . Since the interest is compounded quarterly, it is compounded 4 times per year, so.


1. For our problem we know that  and . We also know for our previous calculations that  and . So lets replace those values in our compound interest formula to find :




We can conclude that after 2 years the customer will have $2,217.71 in his account.

2. We know for our problem that this time , the initial investment remains the same, so , and we also know for our previous calculations that  and . So lets replace those values in our formula one more time:




We can conclude that after 5 years the customer will have $2,589.52 in his account.

Ibelieve the answer would be b.