ind the future value, using the future value formula and a calculator. (Round your answer to the nearest cent.)
$955 at 5.5% compounded quarterly for 3 years
i = .055/3 = .018333...
what is 955(1.018333..)^12 ?
Where did you get the 1.018333?
To find the future value using the future value formula and a calculator, you can use the following steps:
1. Understand the variables:
- Principal amount (P) = $955
- Annual interest rate (r) = 5.5% (convert to decimal by dividing by 100: 0.055)
- Number of compounding periods per year (n) = 4 (quarterly compounding)
- Time in years (t) = 3
2. Plug the values into the future value formula:
Future Value (FV) = P * (1 + r/n)^(n*t)
3. Calculate the future value:
FV = $955 * (1 + 0.055/4)^(4*3)
Now, let's calculate the future value using a calculator:
1. Divide the interest rate by the number of compounding periods per year:
0.055/4 = 0.01375
2. Add 1 to the result:
1 + 0.01375 = 1.01375
3. Raise this value to the power of the total number of compounding periods:
1.01375^(4*3) = 1.01375^12 ≈ 1.1989178596
4. Multiply this result by the principal amount:
$955 * 1.1989178596 = $1146.39 (rounded to the nearest cent)
Therefore, the future value, rounded to the nearest cent, is $1146.39.