Posted by **keleb** on Monday, January 7, 2008 at 7:58pm.

I know how to do simple interest on a loan but how would I figure compound interest on a loan $8,000 invested for one year at 6% compounded quarterly ? with rounded to the nearest dollar thanks in advance for explaining :)

- math please explian -
**Damon**, Monday, January 7, 2008 at 8:13pm
I knew it was coming :)

you are going to do 6% a year compounded quarterly.

that means you will do 6%/4 each time

that is 1.5% every three months.

that means every three months you will multiply whatever is in the bank by 1.015

You do this four times in a year so you multiply the original amount by

1.015 *1.015*1.015*1.015

or 1.015^4

which is

1.06136

\So multiply that by 8,000

=8490.91

to the nearest dollar that is

8,491

so you made 491 in interest that year.

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