document.write( "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.
\n" ); document.write( " \n" ); document.write( "

Algebra.Com's Answer #735866 by Theo(13342) $\"\"$ $\"About$

You can put this solution on YOUR website!
f = p * (1 + r) ^ n\r
\n" ); document.write( "
\n" ); document.write( "\n" ); document.write( "f is the future value
\n" ); document.write( "p is the present value
\n" ); document.write( "r is the interest rate per time period
\n" ); document.write( "n is the number of time periods.\r
\n" ); document.write( "
\n" ); document.write( "\n" ); document.write( "in your problem, the equation becomes:\r
\n" ); document.write( "
\n" ); document.write( "\n" ); document.write( "f = 2000 * (1 + .10/4) ^ (4*4)\r
\n" ); document.write( "
\n" ); document.write( "\n" ); document.write( "this results in a future value of 2969.011241\r
\n" ); document.write( "
\n" ); document.write( "\n" ); document.write( "every 3 months occurs 4 times a year.\r
\n" ); document.write( "
\n" ); document.write( "\n" ); document.write( "this means the interest is compounded quarterly.\r
\n" ); document.write( "
\n" ); document.write( "\n" ); document.write( "the annual interest rate (not the percent) is divided by 4 to get the quarterly interest rate.\r
\n" ); document.write( "
\n" ); document.write( "\n" ); document.write( "the number of years is multiplied by 4 to get the number of quarters.\r
\n" ); document.write( "
\n" ); document.write( "\n" ); document.write( " \n" ); document.write( "

\n" );