Question

You wish to deposit​ $7,000 in an account at the shylock bank. the bank pays interest at a nominal annual rate of​ 10% compounded quarterly. what is the future value in the account after seven​ years?

Answer 1

The formula is
A=p (1+r/k)^kt
A future value?
P present value 7000
R interest rate 0.1
K compounded quarterly 4
T time 7 years
A=7,000×(1+0.1÷4)^(4×7)
A=13,975.47

Answer 2

$13,975.47

Step-by-step explanation:

Given:

Principal deposit amount(P) = $7,000

Annual interest rate = 10% = 0.1

Quarterly interest rate(r) = 0.1 / 4 = 0.025

Number of year = 7 years

Number of quarter(n) = 7 × 4 = 28

Computation of amount after 7 years:

`Amount = p(1+r)^n\\\\Amount = 7,000(1+0.025)^(28)\\\\Amount = 7,000(1.025)^(28)\\\\Amount = 7,000(1.99649502)\\\\Amount = 13,975.4651\\\\`

Amount after 7 years = $13,975.47 (Approx)