Question

Sally inherited $10,000 from her grandmother. She would like to invest her inheritance in a mutual fund through a local bank. One of the options the bank offers is a 3.5% interest bearing account, compounding quarterly. Use the interest formulas to determine the amount of money she has after three years. Use the formula for compounding interest: A = P

Answer 1

Hi there
The formula is
A=p (1+r/k)^kn
A future value?
P present value 10000
R interest rate 0.035
K compounded quarterly 4
N time 3 years
So
A=10,000×(1+0.035÷4)^(4×3)
A=11,102.03

Hope it helps