Final answer:
To find the result of compounding a $700 investment at 11% quarterly over 2 years, you use the compound interest formula and substitute the given values to get A = $872.80.
Step-by-step explanation:
The subject of this question is Mathematics, specifically focusing on the topic of compound interest, which is a common subject in high school-level math courses. To find the amount that results from the $700 invested at 11% compounded quarterly after 2 years, we will use the compound interest formula:
A = P(1 + r/n)(nt)
Where:
A = the amount of money accumulated after n years, including interest.
P = the principal amount ($700).
r = the annual interest rate (decimal) (11% or 0.11).
n = the number of times that interest is compounded per year (quarterly, so n=4).
t = the time the money is invested for, in years (2 years).
Now we substitute our values into the formula:
A = 700(1 + 0.11/4)(4*2)
Calculating further:
A = 700(1 + 0.0275)(8)
A = 700(1.0275)(8)
A = 700 * 1.24685628
A ≈ $872.80
Thus, after a period of 2 years, the $700 investment at 11% interest compounded quarterly will grow to approximately $872.80.