Question

A young graduate looks to save money to buy a house 8.00 years from today. He is somewhat conservative and will invest his money in a bond fund that pays 5.00% APR with quarterly compounding. The graduate invests $10,880.00 today. How much will his account be worth in 8.00 years?

Answer 1

amount = $10923.60

Step-by-step explanation:

given data

time t = 8 year

rate r = 5 %

principal P = $10,880.00

solution

we will use here amount formula that is

amount = principal ×
`(1+(r)/(100))^(t)` ...............................1

put here value we get and we get the amount that is

amount = $10880 ×
`(1+(0.05)/(100))^(8)`

amount = $10923.60

so his account be worth in 8.00 years is $10923.60