SOLUTION: compound interest $500. 5% 10yrs compound quarterly. I know the answer is 821.81 but how. and I know the forumla ia a=p(1+ r/n)^nt help please thank you

Question 131149: compound interest
$500. 5% 10yrs compound quarterly. I know the answer is 821.81 but how. and I know the forumla ia a=p(1+ r/n)^nt help please thank you
Answer by jim_thompson5910(35256) (Show Source): You can put this solution on YOUR website!

Start with the compound interest formula

Plug in p=500, r=0.05 (this is the decimal form of 5% interest), n=4, and t=10

Divide 0.05 by 4 to get 0.0125

Multiply the exponents 4 and 10 to get 40

Add 1 and 0.0125 to get 1.0125

Raise 1.0125 to the 40 th power to get 1.64361946348701

Multiply 500 and 1.64361946348701 to get 821.809731743505

So if you invest $500 at an interest rate of 5%, which is compounded 4 times a year for 10 years, the return is about $821.81 (which is rounded to the nearest cent)
RELATED QUESTIONS
Use compound the interest formulas A=P(1 +r/n) ^nt and A = Pe^rt Suppose that you... (answered by Nate)

Compound Interest. I know the formula and have my teacher's answer to this quesion but... (answered by hydromojo)

Hello, I'm a bit confused with my homework. I am told to find the compound interest but I (answered by josmiceli)

Julie borrowed $400 for 1 year at 8% interest compounded quarterly. What is the compound... (answered by stanbon)

Use the compound interest models A=P(1+r/n)^nt and A=Pe^rt to answer this question.... (answered by jim_thompson5910)

i'm doing business algebra online in college, and we're now talking about continuous... (answered by Theo)

I borrowed $400.00 for 1 year at 8% interest compounded quarterly. What is the compound... (answered by rfer)

Use the compound interest equation {{{A= P(1 + r/n)^nt}}} to find how long, to the... (answered by fractalier,josmiceli)

How much money would need to be deposited into a compound interest savings account... (answered by rfer)