The formula is as follows: A = 100(1 + .04/4)^4*5. First divide .04 by 4 and add 1 to get 100(1.01)^20 Raise 1.01 to the 20th to get 100(1.2202), which equals $122.02. The actual formula is Amount = Principle times [1 plus (the rate divided by the number of times it compounds)] to the power of the number of years times the number of times it compounds.