Question

Complete the following using compound future value. (Use the Table provided.)

Note: Do not round intermediate calculations. Round your final answers to the nearest cent.
Time
6 years
Principal
$ 15,300
Rate
8 %
Compounded
Quarterly
What is amount &
Interest?

Answer 1

We can use the formula for compound interest to calculate the amount and interest:

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

I = A - P

Where:

P = Principal = $15,300

r = Rate = 8% = 0.08

n = Compounding frequency per year = 4 (since it is compounded quarterly)

t = Time period = 6 years

Plugging in the values, we get:

A = 15,300 * (1 + 0.08/4)^(4*6) = $23,659.28

I = 23,659.28 - 15,300 = $8,359.28

Therefore, the amount after 6 years is $23,659.28 and the interest earned is $8,359.28.

I hope this helps.