## Gavin deposited money into his savings account that is compounded annually at an interest rate of 9%. Gavin thought the equivalent quarterly interest rate would be 2.25%. Is Gavin correct? If he is explain why. If he is not correct, state what the equivalent quarterly interest rate is and show how you got your answer.

October 14, 2019// Blog//

A = P(1 + rt)

Where:

·

A = Total Accrued Amount (principal + interest)

·

P = Principal Amount

·

I = Interest Amount

·

r = Rate of Interest per year in decimal; r = R/100

·

R = Rate of Interest per year as a percent; R = r * 100

·

t = Time Period involved in months or years

A = 15,000(1+ 0.07(5))

A = 20,250 they acquired in total for 5 years

The yearly amount the get is 15,000 xx 0.07 = $ 1050 per

year

So in the next 25 years addition of 1050×25 = $26250 they

will get