An initial investment of $12,000 is invested for 2 years in an account that earns 4% interest compounded quarterly. Find the amount of mnoey in the account at the end of the period.
UOG - Henry, Wednesday, April 10, 2013 at 7:02pm
P = Po(1+r)^n.
Po = $12,000
r = (4%/4)/100% = 0.01 = Quarterly % rate expressed as a decimal.
n = 4Comp./yr. * 2yrs. = 8 Compounding periods.
Plug the above values into the given Eq.
and get $12,994.28.