Question 704929: Gary invested $12,000 in an account that pays 4% interst compounded quarterly.about how much interest will his investment earn in 2 years
Answer by lwsshak3(11628)   (Show Source):
You can put this solution on YOUR website! Gary invested $12,000 in an account that pays 4% interst compounded quarterly.about how much interest will his investment earn in 2 years
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compound interest formula: A=P(1+i)^n, P=initial investment, i=interest rate per period, n=number of periods, A=amount after n periods.
For given problem:
P=12000
i=.04/4=.01
n=2*4=8
A=12000(1+.01)^8=12000(1.01)^8≈12994
interest earned=12994-12000≈$994
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