college math

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Cindy deposited $1,000 in an account that pays 12% interest compounded quarterly. How much money will Cindy have in the account after 7 years?

  • college math -

    7*4 = 28 periods
    r = 12/4 = 3% per period

    1000 * (1.03)^28 = 2287.93

  • college math -

    A = P(1+(r/n))^(nt)

    A=Amount present after interest compounded
    P=Initial Deposit
    r=rate expressed as decimal
    n=# of times interest is received in one year. (Look for keywords: quarterly = 4)
    t=timespan of investment

    A=1000(1+(0.12/4))^(4*7)
    A=$2287.93

    Confirms Damon's answer.

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