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3 votes
A $5070 investment earns interest at

compounded quarterly
5% per year
over 15 years.
Use the compound interest formula to
calculate the value of this investment
to the nearest cent.

1 Answer

3 votes

Answer:

Explanation:

The value of the investment can be calculated using the compound interest formula:

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

Where:

A = final amount

P = principal amount (5070)

r = annual interest rate (0.05)

n = number of times the interest is compounded in a year (4)

t = number of years (15)

So,

A = 5070 * (1 + (0.05/4))^(4*15)

A = 5070 * (1.0125)^60

A = 5070 * 2.693260689

A = 13,652.14

The value of the investment after 15 years compounded quarterly at 5% per year is $13,652.14, rounded to the nearest cent.

User Brandon Pugh
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