SOLUTION: Find the future value of $2000 if it is invested for 4 years at an annual interest rate of 10% compounded every 3 months.
Algebra.Com
Question 1120187: Find the future value of $2000 if it is invested for 4 years at an annual interest rate of 10% compounded every 3 months.
Answer by Theo(13342) (Show Source): You can put this solution on YOUR website!
f = p * (1 + r) ^ n
f is the future value
p is the present value
r is the interest rate per time period
n is the number of time periods.
in your problem, the equation becomes:
f = 2000 * (1 + .10/4) ^ (4*4)
this results in a future value of 2969.011241
every 3 months occurs 4 times a year.
this means the interest is compounded quarterly.
the annual interest rate (not the percent) is divided by 4 to get the quarterly interest rate.
the number of years is multiplied by 4 to get the number of quarters.
RELATED QUESTIONS
1. If you lend $3600 to a friend for 15 months at 10% annual simple interest, find the... (answered by stanbon)
I need help with this question
Suppose $10,000 is invested at an annual rate of 5% for (answered by checkley71)
What is the future value of an annuity due of $5645 paid every six months for three years (answered by ikleyn)
Susan invests R45 000 at a simple interest rate of 6% per year. Two years later, she adds (answered by )
How long will it take for an investment to double in value if the annual interest rate is (answered by Boreal)
What is the future value of $2000 in a bank account for 9 years at an annual interest... (answered by rfer)
What is the future value of an initial investment of $5000 at annual rate of 10% interest (answered by rfer)
What is the future value of an initial investment of $8000 at annual rate of 8% interest... (answered by rfer)
How long will it take for an investment to double in value, if the annual interest rate... (answered by lwsshak3)