Question

What is the future value if $18733 is invested at 5.1% for 10 years, compounded quarterly

Answer 1

Explanation:

The compound interest formula is
`P(1+r/n)^(nt)`

• P: the initial amount of cash
• r: interest rate
• n: # of times that interest is compounded per time period
• t: # of time periods

Known information:

• P: 18733
• r: 5.1% or 0.051
• n: quarterly or 4
• t: 10 yrs

Now let's set up the equation:

Future amount:
`18733 (1+(0.051)/(4) )^(4*10)`
`=31,095.49`

Thus the future amount is $31.095.49.

Hope that helps!