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Compute the amount of compound interest earned in 1 year for an investment of \$1,000,000 with a nominal interest rate of 8% compounded quarterly.

P = Po(1+r)^n.

Po = \$1,000,000.

r = (8%/4)/100% = 0.02 = Quarterly % .rate expressed as a decimal.

n 4Comp./yr. * 8trs = 32 Compounding
periods.

Plug the above values into the given Eq and solve for P.

I = P-Po.

CORRECTION: n = 4Comp./yr. * 1yr. = 4
Compounding periods.

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