Question

$500 principal earning 4% cimpunded quarterly, after 6yrs

I need to show my work but I really don't understandhow to do it the easy way...

Answer 1

Principal, P= 500
interest = 4%/4 = 0.01 (per quarter)
Number of periods, n = 6*4 =24 quarters

Compound interest formula:
Future value:

`F=P(1+i)^n`

`=500(1+0.01)^(24)`

`=500(1+0.01)^(24)`

`=634.87` to the nearest cent.

In my books, this is the easiest way. If you have a different way, or if there are questions, please do not hesitate to let me know.