Question

Quantum Logic recently expanded its operations at a cost of $450,000. Management expects that the value of the investment will grow at a rate of 8% per year compounded quarterly for the next 5 years. Find the future value of the investment

Answer 1

Given:

Quantum Logic recently expanded its operations at a cost of $450,000.

So, P = 450,000

The rate of growth = r = 8% = 0.08

compounded quarterly, n = 4

We will find the future value of the investment (A) after t = 5 years

We will use the following formula:

`A=P\cdot(1+(r)/(n))^(nt)`

Substitute with the given values:

`\begin{gathered} A=450,000\cdot(1+(0.08)/(4))^(4\cdot5) \\ \\ A=450,000\cdot1.02^(20)\approx668,676.33 \end{gathered}`

So, the answer will be:

The future investment = $668,676.33