Question

An investment of $7,650 earns interest at the rate of 5% and is compounded quarterly. What is the accumulated value of the investment at the end of 9 years?

Answer 1

$11,964.17

Explanation:

Answer 2

`\$11,964.17`

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=9\ years\\ P=\$7,650\\ r=5\%=5/100=0.05\\n=4`

substitute in the formula above

`A=7,650(1+(0.05)/(4))^(4*9)`

`A=7,650(1.0125)^(36)`

`A=\$11,964.17`