FINANCE
posted by lily on .
You deposit $2,000 in an account that pays 8% interest compounded semiannually. After 4 years, the interest rate is increased to 8.28% compounded quarterly. What will be the value of the account after 4 more years? (Do not round until the final answer. Then, round to the nearest cent.)

Pt = Po(1+r)^n.
r = (8%/2) / 100% = 0.04 = Semiannual
% rate expressed as a decimal.
n = 2 comp./yr * 4yrs = 8 Compounding
periods.
Pt = 2000(1.04)^8 = 2737.138101 after 4 yrs.
r = (8.28%/4) / 100% = 0.0207 = QPR
expressed as a decimal.
n = 4 comp./yr * 4 yrs.=16 Compounding periods.
Pt = 2737.138101(1.0207)^16 = $3798.98.