Question

Please Help.

After 3 years what is the total amount of an investment of $1500 in an account paying 3.5% interest, compounded quarterly?
Question 7 options:

A) $1908.42

B) $2266.60

C) $1724.36

D) $1665.31

Answer 1

Option D is the correct anwer

Explanation:

This can be calculated using the relation,

`A=P(1 + (r)/(m))^(mt)`

Where ,

A is total amount

P is the principal

r is the rate

t is the time

m is the compounding frequency

From the question,

P=$1500

r=3.5%=0.035

t=3yrs

m=4

By substitution,

`A = 1500(1 + (0.035)/(4))^(4 * 3)`

`A = 1500(1 + 0.00875)^(12)`

`A = 1500 * (1.00875)^(12)`

`A = 1665.305`

A=$1665.31