Question

find the total amount earned on a $1,000 investment after 15 years at 4% interest compounded quartely.

Answer 1

We have the following info given:

P=1000 is the investment, t=15 represent the number of years, 4% represent the interest (i) compunded quarterly. We want to estimate the amount earned (A) and we can use this formula:

`A=P(1+(r)/(n))^(nt)`

and for this case n=4 since in a year we have 4 quarts . then if we replace we got this:

`A=1000(1+(0.04)/(4))^(4\cdot15)`

And if we solve we got:

`A=1000(1.01)^(60)=1816.696`

And if we round this we got 1816.70 who represent the amount of money earned in the period given