Suppose you invest $2,500 into a regular savings account with 2.95% annual interest rate that compounds quarterly. How much would your investment be worth in 10 years?

1 Answer
Ayako_Sho
Jun 4, 2016

#$3554.18#

Explanation:

Principle = #$2500#
Interest rate = #2.95%# = 0.0295
Time = 10 years
Compounding period = #Time xx 4# = 40

Thus interest rate = #0.0295//4#= 0.007375

#A = P(1+i)^n#
#A = 2500(1+0.007375)^40#
#A = 2500(1.007375)^40#
#A = 2500(1.3416)#
#A = 3354.18#

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