Finance

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You deposit a single amount of $50,000 in a savings account that pays 7.6% annual interest (compounded quarterly). How much will you have at the end of four and a half years?

  • Finance -

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

    P = 50,000
    r = 0.076
    n = 4 (quarterly)
    t = 4.5

    A(4.5) = 50000(1 + 0.076/4)^(4(4.5))
    A(4.5) = 50000(1 + 0.019)^(18)
    A(4.5) = 50000(1.019)^(18)
    A(4.5) = 50000(1.40325)
    A(4.5) = 70,162.50

    50,000 + 70,162.50 = 120,162.50

  • Finance -

    thats must be wrong right?

    because i got 50 000 (1+(14/4*100))^(4*4,5) = 70 162.54 after the four and the half year.

    Not adding that with 50 000. Because you earned 20 162.54..

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