What is the final amount of $3050.00 that is put into a savings account with 8% interest rate for 25 years, if the interest is compounded 4 times per year?

The formula required is:

where A is the amount after t years of the principal P invested at an annual interest rate r (expressed as a decimal fraction) compounded n times per year.
Plugging in the given values, we get:

The final amount is $22,096.17

$22,096.17

Further explanation

Given:

The initial amount = $3,050.00Time = 25 yearsInterest rate = 8%, therefore 8% equal to 0.08Compounded n = 4 times per year

Question:

What is the final amount?

The Process:

Compound interest is the interest earned from the initial amount and the interest earned previously. The formula for the balance A of the savings with compound interest is

P = principal (initial amount)r = annual interest rate (in decimal form)t = time (in years)n = the number of periods of interest is compounded per year

Let us calculate the final amount.

Thus the final amount that is put into a savings account for 25 years is $22,096.17

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