Calculate the interest amount of a $4,300 investment for a period of 20 years with a compound interest rate of 3.7% compounded quarterly.(1 point)
Responses
$4,681.92
$4,681.92
$4,712.18
$4,712.18
$8,981.92
$8,981.92
$4,702.27
To calculate the interest amount, we can use the formula for compound interest:
A = P * (1 + r/n)^(n*t)
Where:
A = final amount
P = principal investment amount
r = annual interest rate (as a decimal)
n = number of times interest is compounded per year
t = number of years
Given:
P = $4,300
r = 3.7% = 0.037 (as a decimal)
n = quarterly compounding = 4 (since there are 4 quarters in a year)
t = 20 years
Plugging the values into the formula:
A = 4300 * (1 + 0.037/4)^(4*20)
A ≈ 4681.92
Therefore, the interest amount for a $4,300 investment over a period of 20 years with a compound interest rate of 3.7% compounded quarterly is approximately $4,681.92.