The account balance will be $6642 after seven years.
Step-by-step explanation:
To find the amount after seven years, a certain formula is used.
Amount = [tex]P( 1+r/n)^{n\times t}[/tex]
where,
P is the principal amount that is invested in the account.
Therefore, P = 4500 dollars.
r is the rate of interest. (r = 5.5 %)
Therefore, r = 5.5/100 = 0.055
n is the number of time the interest is compounded per year which is n= 4.
t is the time period which is t = 7 years.
Now, substituting all the above values in the formula,
Amount = [tex]4500(1+0.055/4)^{4\times 7}[/tex]
⇒ [tex]4500(4.055/4)^{28}[/tex]
⇒ [tex]4500(1.014)^{28}[/tex]
⇒ [tex]4500\times1.4759[/tex]
⇒ 6641.55 (which is approximately equal to 6642)
⇒ 6642 dollars.
The account balance after 7 years is $6642.
