Exponential Word Problem
posted by Jus .
An investment pays 3.5 percent interest, compounded quarterly.
a) write an equation to express the amount A, of the investment as a function of time, t, in years.
The answer is
A(t)=P(1.00875)^4t
Ok, but my question is this:
Why isn't the equation
A(t)=P(1.035)^4t, if the interest percent is 3.5% wouldnt it make sense that it's 1.035 in the equation and not 1.00875. Could someone clarify for me if I am right or wrong, and why.
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