Question

You invest $500 in an account that has a annual interest rate of 8%, compounded weekly for 12 years. What is the equivalent interest rate and how many times will the money be compounded? How much will you have?

Answer 1

8% and 16 times

Answer 2

8% annual interest rate when compounded weekly =

(1 + .08/ 52)^52 = 1.00153846153846154^52 = 1.08322047419671 =
8.322047419671% equivalent interest rate

In 12 years this will be compounded 624 times

12 year Total = 500 * (1.08322047419671)^12 =
1,304.8852611583 =
1,304.89 (rounded)