Question

g You decide to deposit $ 2 comma 000 at a local bank for three years at a 8​% rate of interest compounded quarterly. The future value of your investment is approximately equal to​ ________. (Use the formula method and round to the nearest dollar.

Answer 1

Using the formula for the compound interest as shown below...

A= P[1+r/n]^nt

A= the new compounded balance

P=the principal amount invested.

t=the time,

r=the rate (in decimal form)

n=the number of times it is compounded.

Thus for the question above,

p= $2000.

t=3 years

r=8% or 0/08 in decimal form

n=4(quarter)

A= 2000(1+0.08/4)^(4)(3)

=2000(1.02)^12

=2000X 1.268241794

=2536.48358913

To round it off to the nearest dollar then the answer is...

=$3,000