1. **State the problem:**
We have a principal amount $P = 7500$ deposited at an interest rate of 6.5% per year compounded quarterly for 25 years. We need to find the accumulated sum.
2. **Formula used:**
The formula for compound interest is:
$$A = P \left(1 + \frac{r}{n}\right)^{nt}$$
where:
- $A$ is the accumulated amount (principal + interest),
- $P$ is the principal amount,
- $r$ is the annual interest rate (decimal),
- $n$ is the number of times interest is compounded per year,
- $t$ is the time in years.
3. **Identify values:**
- $P = 7500$
- $r = 6.5\% = 0.065$
- $n = 4$ (quarterly compounding)
- $t = 25$
4. **Substitute values into the formula:**
$$A = 7500 \left(1 + \frac{0.065}{4}\right)^{4 \times 25}$$
5. **Simplify inside the parentheses:**
$$1 + \frac{0.065}{4} = 1 + 0.01625 = 1.01625$$
6. **Calculate the exponent:**
$$4 \times 25 = 100$$
7. **Calculate the accumulated amount:**
$$A = 7500 \times (1.01625)^{100}$$
8. **Calculate the power:**
Using a calculator,
$$(1.01625)^{100} \approx 4.724$$
9. **Multiply to find $A$:**
$$A = 7500 \times 4.724 = 35430$$
10. **Final answer:**
The accumulated sum after 25 years is approximately **35430**.
Compound Interest 478Bdd
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