I don't understand how you did it help

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A $4000 deposit at an APR of 5.6% with a quarterly compounding for 8 years .
The amount after 8 years would be ???

  • I don't understand how you did it help -

    OK, step by step

    5.6 % = .056 yearly nominal

    but it is quarterly/ so divide by 4
    .014
    so every three months, you multiply by
    1.014
    in other words add 1.4 percent of what you have to what you have every three months
    Do this for 8 years which is 32 quarters
    1.014 * 1.014 * 1.014 32 times
    or
    1.014^32 = 1.56032
    so
    4000 * 1.56032 = 6241.29

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