Algebra

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$3,800 principal earning 2%, compounded quarterly, after 7 years

  • Algebra -

    Pt = Po(r + 1)^n.

    r = APR / 4 = 2 / 4 = 0.5% = 0.005 =
    Quarterly int. rate expressed as a decimal.

    n=7yrs * 4 comp/yr = 28 comp. periods.

    Pt = 3800(1.005)^28,
    Pt = 3800 * 1.14987261 = $4369.52 = principal after 7 yrs.

    Int. = Pt - Po = 4369.52 - 3800 = $569.52

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