Question

Find the accumulated value of an investment of $1800 at 10% compounded quarterly for 5 years.

Answer 1

$2949.51

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To find the accumulated value of an investment, we will use the formula for compound interest, which is:

• 
  `A = P(1 + r/n)^(nt)`
  

where,

• P = principal amount (the initial amount of money), which in this case is $1800.
• r = annual interest rate (in decimal form), which is 10% or 0.10.
• n = number of times that interest is compounded per unit t, for our problem that would be quarterly or 4 times a year.
• t = time the money is invested for in years, which is given as 5 years.

Now, we will plug in the values and calculate the total accumulated amount:

• 
  `A = P(1 + r/n)^(nt) =2949.51`
  

After calculating this, we find that the accumulated value of the investment after 5 years is approximately $2949.51.