SOLUTION: You invest $10,000 in Rapid Growth Funds, which appreciate by 5% per year, with yields reinvested quarterly. By how much (in dollars) will your investment have grown after 4 years?

Question 1190108: You invest $10,000 in Rapid Growth Funds, which appreciate by 5% per year, with yields reinvested quarterly. By how much (in dollars) will your investment have grown after 4 years? (Round your answer to the nearest cent.)
Answer by Theo(13342) (Show Source): You can put this solution on YOUR website!
the 5% interest rate per year is being compounded quarterly.
the interest rate per quarter will be 5/4 = 1.25%.
4 years * 4 quarters per year will b equal to 16 quarters/

if the interest rate is 1.25% per quarter, then the growth factor is equal to 1.0125 per quarter.

the future value of he 10,000 will be equal to 10,000 * (1.0125) ^ 16 = 12198.89548.

round to the nearest penny to get 12198.90.

let me know if you have any questions.

theo

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