Math Personal Finance

Assume we invest $2000 for one year in a savings account that pays an APR (Annual Percentage Rate) of 10% compounded quarterly. Calculate the interest and compound it by hand each quarter rather than using the compound interest formula. The total interest the account has earned after one year is $______.

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asked by Alexis
  1. 2000 x 0.10/4 = interest at end of quarter 1. Then 2000 + interest = total and I'll call that a.
    Then a x 0.10/4 = interest earned in quarter 2. interest + a = total at end of quarter 2 and I'll call that b.
    Continue for 3rd and 4th quarters.

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    posted by DrBob222

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