Using the Compound Interest Table, calculate the compound amount after 5 years for an investment of $7,700 at 6% interest compounded quarterly. My answer is $10,370.82 is this correct?
7700(1+.06/4)^(4*5) = 10,370.78
Looks good to me.
Compound amount after 5 years for an investment of $7,700 at 6% interest compounded quarterly? What is the amount of compound interest for the invesment
To calculate the compound amount after 5 years for an investment at a given interest rate compounded quarterly, you can use the formula:
A = P(1 + r/n)^(nt)
Where:
A is the compound amount
P is the principal amount (initial investment)
r is the annual interest rate (expressed as a decimal)
n is the number of times interest is compounded per year
t is the number of years
In this case:
P = $7,700
r = 6% = 0.06 (converted to decimal)
n = 4 (quarterly compounding)
t = 5 years
Plug these values into the formula:
A = 7700(1 + 0.06/4)^(4*5)
A = 7700(1 + 0.015)^(20)
A = 7700(1.015)^(20)
A ≈ $10,370.82
So, your answer of $10,370.82 is correct!