Remember that
The compound interest formula is equal to
[tex]A=P(1+\frac{r}{n})^{nt}[/tex]
where
A is the Final Investment Value
P is the Principal amount of money to be invested
r is the rate of interest in decimal
t is Number of Time Periods
n is the number of times interest is compounded per year
In this problem we have
P=$4,500
r=8%=0.08
n=4
t=3 years
substitute the given values in the formula
[tex]A=4,500(1+\frac{0.08}{4})^{4\cdot3}[/tex][tex]\begin{gathered} A=4,500(1.02)^{12} \\ A=\$5,707.09 \end{gathered}[/tex]Find out the interest
I=A-P
I=5,707.09-4,500
