Question

If $2940 is invested at 3.2% compounded quarterly, how much is in the account after 8 years?

Answer 1

The future value is $3793.776

Explanation:

Given

`PV = 2940` --- present value

`r = 3.2\%` --- rate

`t = 8` --- time

`n = 4` --- quarterly

Required

Determine the future value

This is calculated using:

`FV = PV(1 + (r)/(n))^{nt`

So, we have:

`FV =2940 * (1 + (3.2\%)/(4))^{4*8`

`FV =2940 * (1 + (3.2)/(400))^{32`

`FV =2940 * (1 + 0.008)^{32`

`FV =2940 * (1.008)^{32`

`FV =2940 * 1.2904`

`FV =3793.776`