Question

How much money will you have in 8 years if you invest $4000 at 3.5 compounded quarterly?

Answer 1

I assume that means 3.5% annual interest.

Each quarter we multiply our money by
`1 + (0.035)/(4)`

Eight years is 32 quarters.

So after eight years we have

`A = 4000\left( 1 + (0.035)/(4) \right)^(32) = \$5286.08`

That's compared to $5120, principal plus simple interest of just 8(3.5%)=28% of 4000.

Answer: $5286.08