What is the amount of $480 invested at 6% quarterly for a period of 3 years?
what's the answer?
480 [1 + (.06 / 4)]^(3 * 4)
To calculate the amount of money after a period of time with compound interest, we can use the formula:
A = P(1 + r/n)^(nt)
Where:
A = final amount
P = initial principal (amount invested)
r = annual interest rate (as a decimal)
n = number of times interest is compounded per year
t = number of years
In this case:
P = $480
r = 6% = 0.06 (as a decimal)
n = 4 (quarterly compounding)
t = 3 years
Substituting the values into the formula:
A = 480(1 + 0.06/4)^(4*3)
A = 480(1 + 0.015)^12
A = 480(1.015)^12
Calculating (1.015)^12:
(1.015)^12 ≈ 1.1956
A = 480 * 1.1956
A ≈ $574.37
Therefore, the amount after investing $480 at 6% quarterly for 3 years would be approximately $574.37.
To calculate the amount of money when $480 is invested at an interest rate of 6% per quarter for a period of 3 years, we need to use the compound interest formula.
The formula to calculate compound interest is:
A = P(1 + r/n)^(nt)
Where:
A = the final amount after the investment period
P = the principal amount (initial investment)
r = the annual interest rate (in decimal form)
n = the number of times interest is compounded per year
t = the number of years
In this case, we have:
P = $480
r = 6% = 0.06 (in decimal form)
n = 4 (since the interest is compounded quarterly)
t = 3 years
Plug in these values into the formula and solve for A:
A = 480(1 + 0.06/4)^(4*3)
Now, let's calculate the amount:
A = 480(1 + 0.015)^12
A = 480(1.015)^12
A ≈ 480 * 1.19562
A ≈ $573.29
Therefore, the amount of $480 invested at a 6% quarterly interest rate for 3 years would be approximately $573.29.