calculate the compound interest on an investment of $45,000 at 6% interest compounded quarterly fro 3 years
calculate the compound interest on an investment of $45,000 at 6% interest compounded quarterly fro 3 years
Formula for compound interest:
A=P(1+i)^n
A=amount at the end of n periods (future value)
P=amount invested (present value)
i=interest per compounding period. 6% per annum is equivalent to 1.5% per 3 months, the compounding period.
n=number of periods.
Use your calculator to find
A=45000(1+0.015)^(3*4)
To calculate the compound interest on an investment, we can use the formula:
A = P * (1 + r/n)^(n*t)
where:
A = the future value of the investment
P = the principal amount (initial investment)
r = the annual interest rate (as a decimal)
n = the number of times the interest is compounded per year
t = the number of years
In this case, the principal amount (P) is $45,000, the annual interest rate (r) is 6% (or 0.06 as a decimal), the interest is compounded quarterly (n = 4 per year), and the investment duration (t) is 3 years.
Let's plug in the values and calculate:
A = 45000 * (1 + 0.06/4)^(4*3)
A = 45000 * (1 + 0.015)^12
A = 45000 * (1.015)^12
A ≈ 45000 * 1.196665
A ≈ $53849.84
To find the compound interest, subtract the principal amount from the future value:
Compound Interest = A - P
Compound Interest = 53849.84 - 45000
Compound Interest ≈ $8,849.84
Therefore, the compound interest on the investment of $45,000 at 6% interest compounded quarterly for 3 years is approximately $8,849.84.
To calculate the compound interest on an investment, we can use the following formula:
A = P(1 + r/n)^(nt)
Where:
A = the amount after interest has been compounded
P = the principal amount (initial investment)
r = the interest rate (in decimal form)
n = the number of times that interest is compounded per year
t = the number of years
In this case, the principal amount (P) is $45,000, the interest rate (r) is 6% (0.06 in decimal form), the interest is compounded quarterly (n = 4), and the investment period is 3 years (t = 3).
Let's substitute these values into the formula and calculate the compound interest:
A = 45,000(1 + 0.06/4)^(4*3)
A = 45,000(1.015)^(12)
A ≈ 45,000(1.195618430)
Using a calculator, we find that A ≈ $53,802.83.
To find the compound interest, we subtract the principal amount from the amount after interest has been compounded:
Compound Interest = A - P
Compound Interest = $53,802.83 - $45,000
Compound Interest ≈ $8,802.83
Therefore, the compound interest on an investment of $45,000 at 6% interest compounded quarterly for 3 years is approximately $8,802.83.