calculate the future value of an investment of $8,500 if it is to be invested for 9 years at an interest rate of 6.1%, compounded quarterly.
http://www.google.com/search?sourceid=chrome&ie=UTF-8&q=calculate+compound+interest
i = .061/4 = .01525
n= 9(4) = 36
amt = 8500(1.01525)^36 = ....
To calculate the future value of an investment compounded quarterly, you can use the formula for compound interest:
Future Value = Principal * (1 + (interest rate / n))^(n * time)
Where:
- Principal is the initial investment amount ($8,500)
- Interest rate is the annual interest rate (6.1% or 0.061)
- n is the number of times interest is compounded per year (quarterly, so n = 4)
- Time is the length of the investment in years (9 years)
Let's plug in the values into the formula:
Future Value = $8,500 * (1 + (0.061 / 4))^(4 * 9)
Now, let's calculate it step by step:
First, calculate the value inside the parentheses:
1 + (0.061 / 4) = 1.01525
Next, raise this value to the power of (4 * 9):
(1.01525)^(4 * 9) = 1.01525^36 ≈ 1.65672228
Finally, multiply the result by the principal:
$8,500 * 1.65672228 ≈ $14,070.15
Therefore, the future value of an investment of $8,500, compounded quarterly at an interest rate of 6.1% over 9 years, would be approximately $14,070.15.