Final answer:
The value of N for the total term of the investment with quarterly compounding over a period of 6.50 years is 26 quarters.
Step-by-step explanation:
The value of N that corresponds to the total term of the investment, where the investment is compounded quarterly, can be determined by calculating the total number of quarters over the investment period. Since the investment was made 3.00 years ago and will be withdrawn in 3.50 years from now, the total investment period is 6.50 years. To find N, we calculate the number of quarters in 6.50 years: N = 6.50 years × 4 quarters/year. Hence, N = 26 quarters.
Compound interest differs from simple interest in that it is calculated on the principal plus the accumulated interest over time. Compared to simple interest, compound interest can result in a higher amount of interest earned, particularly over longer periods and with larger sums of money, as it considers the effect of compounding.