If $12000 is invested at 4% compound quarterly, what is the amount after 8 years?
2 Answers
Explanation:
okay so we are interested in years and we know there are 4 quarters in a year so quarterly compounded interest is
now for the first quarter it would be
quarter two is whatever was made in quarter 1 plus quarter 2
this relates to the following for years
Explanation:
Use the interest formula:
Where:
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Now we can gather our knowledge and use the formula to find what we need to know. Start by plugging in values already known. Remember to convert the percent rate into a decimal.
#A = color(darkblue)(12000)(1+color(darkgreen)(0.04)/color(crimson)(4))^((color(crimson)(4)*color(magenta)(8)))#
Find
#color(lime)(A) = 12000(1+0.01)^(32)#
#color(lime)(A) = 12000(1.01)^(32)#
#color(lime)(A) = 12000(1.37494067853)#
#color(lime)(A) = 16499.2881424#
Please note, a calculator was used to keep computation accurate. Always use a calculator and round the final answer, never round a number during the process if at all possible.
#A~~color(lime)16499.29#
So, 8 years after investing, you get about