determine the amount of an inverstment if 400.00 is invested at an interest rate 7.25% compounded quarterly for 7 years
To determine the amount of an investment, you can use the formula for compound interest:
A = P(1 + r/n)^(nt)
Where:
A = the future value of the investment
P = the principal amount (initial investment)
r = the interest rate (in decimal form)
n = the number of times interest compounds per year
t = the number of years
In this case, P = $400.00, r = 7.25% = 0.0725 (in decimal form), n = 4 (compounded quarterly), and t = 7 years.
Plugging the values into the formula, we can calculate the future value of the investment:
A = 400(1 + 0.0725/4)^(4*7)
A = 400(1.018125)^28
A ≈ 400(1.266585)
A ≈ $506.63
Therefore, the amount of the investment after 7 years with an interest rate of 7.25% compounded quarterly would be approximately $506.63.