Question

Find the future value if $3,6000 is invested for 8 years at an annual rate of 7% compounded quarterly.

Answer 1

$62,719.69

Explanation:

`A=A_0(1+(r)/(n))^(nt)`

`n` is the number of compoundings per year

`A_0` is the initial amount

`A` is the future amount

`t` is the number of years

`r` is the rate

We are given
`A_0=3600`,

the number of years is
`t=8`,

`n=4` (it is being compounded quarterly),

and
`r=.07`.

So let's plug this in:

`A=36000(1+(.07)/(4))^(4 \cdot 8)`

`A=36000(1.0175)^(32)`

Put left-hand side into the calculator:

`A=62719.69`