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algebra

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determine the amount of an investment if $500 is invested at an interest rate of 4.25% compounded quarterly for 12 years?

  • algebra -

    Use
    P(1+r)^n
    Since interest is compounded quarterly,
    the interest rate has to be divided by 4 to get the quarterly rate. The number of periods (years) has to be multiplied by 4 to get quarters.

    P=500
    R=(1+0.0425/4)
    n=12*4=48

    So
    500*(1+0.0425/4)^48
    =830.41

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