Final answer:
The total number of compounding periods (N) for the interest compounded quarterly from 2.50 years to 8 months ago is 7.
Step-by-step explanation:
To calculate the balance of a savings account 8 months ago with the interest compounded quarterly, you will need to determine the total number of compounding periods that have passed between 2.50 years ago and 8 months ago. Since 2.50 years is equivalent to 30 months, and 8 months ago means 22 months have passed (30 months - 8 months), we need to convert this duration into quarters because the interest is compounded quarterly.
There are 4 quarters in a year, so we devise 22 months by 3 months per quarter, which gives us approximately 7.33 quarters. However, because interest is only compounded at the end of each quarter, we must round the number of compounding periods N down to the nearest whole number. This gives us a value of N = 7 complete quarters.
Therefore, in this context, if the interest rate on a savings account is compounded quarterly, the value of N, corresponding to the total term of the investment between 2.50 years ago and 8 months ago, is 7.