Question

Find the compound interest $12,500 at 12% compounded quarterly for 5 years

Answer 1

Given:

`\begin{gathered} \text{ Principal Amount=12500} \\ \text{Interest rate=12\%} \\ \text{Compund quarterly} \\ \text{time = 5 year} \end{gathered}`

Formula of compound interest:

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

Where,

`\begin{gathered} A=\text{ Amount } \\ P=\text{ Principal} \\ n=\text{Number of time interest is compounded per unit }^(\prime)t^(\prime) \\ t=\text{ time} \\ r=\text{ interest rate} \end{gathered}`
`\begin{gathered} P=12500 \\ r=(12)/(100) \\ r=0.12 \\ n=3 \\ t=5 \end{gathered}`
`\begin{gathered} A=P(1+(r)/(n))^(nt) \\ A=12500(1+(0.12)/(3))^(3*5) \\ A=12500(1+0.04)^(15) \\ A=12500(1.04)^(15) \\ A=12500*1.8009 \\ A=22511.79 \end{gathered}`

The final amount after 5 year is 22511.79