Question

You deposit 10,000 into a savings account that compounds quarterly. The account has an interest rate of 3.7%. What would be the value of the investment after 30 year

Answer 1

30189.155

Explanation:

Recall the compound interest formula :

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

P = principal = 10000

r = rate = 3.7% = 0.037

n = quarterly = 4

t = 30

A = 10000(1 + 0.037/4)^30*4

A = 10000(1 + 0.00925) ^120

A = 10000(1.00925)^120

A = 10000 * 3.0189155

A = 30189.155