Question

Elizabeth invests $7567 in a savings account with a fixed annual interest rate of 5% compounded quarterly. What will the account balance be after 7 years?

Answer 1

FV= $10,714.81

Explanation:

Giving the following information:

Initial investment= $7,567

Number of periods= 7*4 = 28 quarters

Interest rate= 0.05/4= 0.0125

To calculate the future value, we need to use the following formula:

FV= PV*(1+i)^n

FV= 7,567*(1.0125^28)

FV= $10,714.81