you deposit $1000 for 4 years at an interest rate of 2% if the interest is compounded quarterly how much would you have at the end of the fours years
you deposit $1000 for 4 years at an interest rate of 2% if the interest is compounded quarterly how much would you have at the end of the fours years
To calculate the future value of an investment with compound interest, you can use the formula:
A = P(1 + r/n)^(nt)
Where:
A = the future value of the investment
P = the principal amount (initial deposit)
r = the annual interest rate (expressed as a decimal)
n = the number of times interest is compounded per year
t = the number of years
In this case, you have:
P = $1000
r = 2% or 0.02 (since it's given as a percentage)
n = 4 (compounded quarterly)
t = 4 years
Substitute these values into the formula:
A = 1000(1 + 0.02/4)^(4*4)
Now simplify this equation:
A = 1000(1.005)^16
Calculating the value within the parentheses:
A = 1000(1.082432971)
Finally, multiply the principal amount by the value within the parentheses:
A ≈ $1082.43
Therefore, you would have approximately $1082.43 at the end of the four years.