Question

If 3000 is placed in an account at 5% interest and is compounded quarterly for 5 years.How much is in the account at the end of 5 years?

Answer 1

FV= $3,846.11

Explanation:

Giving the following information:

Initial investment (PV)= $3,000

Number of periods (n)= 5*4= 20 semesters

Interest rate (i)= 0.05/4= 0.0125

To calculate the Future Value, we need to use the following formula:

FV= PV*(1 + i)^n

FV= 3,000*(1.0125^20)

FV= $3,846.11