Find the compound amount for the deposit and the amount of interest earned.
​$7200 at 8.5​% compounded quarterly for 2 years
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Part 1
The compound amount after 2 years is ​$
  
enter your response here.
​(Do not round until the final answer. Then round to the nearest cent as​ needed.)

To calculate the compound amount, we will use the compound interest formula:

\[
A = P \left( 1 + \frac{r}{n} \right)^{nt}
\]

Where:
- $ A $ is the compound amount.
- $ P = 7200 $ is the principal (the initial deposit).
- $ r = 0.085 $ is the annual interest rate (8.5% written as a decimal).
- $ n = 4 $ is the number of times the interest is compounded per year (quarterly compounding).
- $ t = 2 $ is the time in years.

Now, let’s calculate this step-by-step. 

First, substitute the values into the formula:

\[
A = 7200 \left( 1 + \frac{0.085}{4} \right)^{4 \times 2}
\]

I'll calculate this for you.The compound amount after 2 years is approximately **$8519.01**.

### To find the interest earned:
Interest earned = Compound Amount - Principal

\[
\text{Interest} = 8519.01 - 7200 = 1319.01
\]

Thus, the interest earned is **$1319.01**.

Would you like further details or have any questions about the process?

Here are some related questions to consider:
1. What would the compound amount be after 5 years?
2. How would the result change with monthly compounding?
3. What if the interest rate was 7% instead of 8.5%?
4. How is compound interest different from simple interest?
5. How can you calculate the effective annual rate from the nominal rate?

**Tip**: When solving compound interest problems, always ensure that the interest rate and compounding frequency are aligned (e.g., annual, quarterly, monthly).

$7200 at 8.5% compounded quarterly for 2 years. Find the compound amount for the deposit and the amount of interest earned.

Learn how to calculate the compound interest on a $7200 deposit at 8.5% compounded quarterly for 2 years. Step-by-step solution, including the compound interest formula and interest earned. Suitable for high school students.

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