document.write( "Question 1190965: What is the equation for this problem: Determine the amount of an investment if 500 $ is invested at an interest rate of 4.25% compounded quarterly for 12 years \n" ); document.write( "
Algebra.Com's Answer #822695 by Theo(13342)\"\" \"About 
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the equation is f = p * (1 + r) ^ n
\n" ); document.write( "f is the future value
\n" ); document.write( "p is the present value
\n" ); document.write( "r if the interest rate per time period.
\n" ); document.write( "n is the number of time periods.\r
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\n" ); document.write( "\n" ); document.write( "4.25% per year compounded quarterly is equal to 4.25/4 = 1.0625% per quarter.
\n" ); document.write( "12 years * 4 quarters per year = 48 quarters.
\n" ); document.write( "the growth rate is equal to 1.0625% / 100 + 1 = 1.010625 per quarter.
\n" ); document.write( "this means that 1 + r = 1.010625
\n" ); document.write( "the formula becomes:
\n" ); document.write( "f = 500 * 1.010625 ^ 48 = 830.4085123.\r
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\n" ); document.write( "\n" ); document.write( "this might be a little cryptic, so i'll give you the same info in a slightly different way.
\n" ); document.write( "the formula is f = p * (1 + r) ^ n
\n" ); document.write( "the time periods are in quarters.
\n" ); document.write( "the annual growth rate is 4.25% / 100 = .0425.
\n" ); document.write( "when compounded quarterly, you take the annual growth rate and divide it by 4 to get a quarterly growth rate of .0425 / 4 = .010625 per quarter.
\n" ); document.write( "n = 12 years * 4 quarters per year = 48 quarters.
\n" ); document.write( "the formula becomes:
\n" ); document.write( "f = 500 * (1 + .010625) ^ 48 = 830.4085123.\r
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\n" ); document.write( "\n" ); document.write( "i'll be available to answer any questions or concerns you might have about this.
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