Paul, who is self employed, placed $30,000 in an account that pays 6% annual interest, compounded quarterly. How much interest was earned in 10 years?

Step-by-step explanation:

We would apply the formula for determining compound interest which is expressed as

A = P (1+r/n) ^nt

Where

A = total amount in the account at the end of t years

r represents the interest rate.

n represents the periodic interval at which it was compounded.

P represents the principal or initial amount deposited

From the information given,

P = 30000

r = 6% = 6/100 = 0.06

n = 4 because it was compounded 4 times in a year.

t = 10 years

Therefore,.

A = 30000 (1 + 0.06/4) ^4 * 10

A = 30000 (1 + 0.015) ^40

A = 30000 (1.015) ^40

A = $54421

The amount of interest earned after 10 years is

54421 - 30000 = $24421