Question

After 7 years, what is the total amount of a compound interest investment of an initial

principal of $1685 at a rate of 4.3% compounded quarterly?

A. 1942.18
B.373,709.25
C.2461.55
D.2273.13

Answer 1

Option D. $2273.13

Explanation:

we know that

The compound interest formula is equal to

`A=P(1+(r)/(n))^(nt)`

where

A is the Final Investment Value

P is the Principal amount of money to be invested

r is the rate of interest in decimal

t is Number of Time Periods

n is the number of times interest is compounded per year

in this problem we have

`t=7\ years\\ P=\$1,685\\ r=0.043\\n=4`

substitute in the formula above

`A=\$1,685 (1+(0.043)/(4))^(4*7)=\$2,273.13`