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March 30, 2017

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An amount of $5000 is invested at an interest rate of 7% per year, compounded quarterly.

Find the value A(t) of the investment after t years.

  • math - ,

    A(t) = Ao(r + 1)^n.

    r = (7/4) / 100 = 0.0175 = Quarterly
    percentage rate(QPR).

    n = 4 comp / yr * t yrs = 4t.
    t = Time for maturity or withdrawal in years.

    A(t) = 5000(1.0175)^4t.

    A(5) = 7073.89.

    A(8) = 8711.07.

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