Question

Find the amount in a account where $200 is invested at 3.5% compounded quarterly for a period of 3 years.

Answer 1

$222.04

Explanation:

Use the compound amount formula A = P(1 + r/n)^(nt), where n is the number of times interest is compounded per year, t is the number of years and r is the interest rate as a decimal fraction.

Here, A = ($200)(1 + 0.035/4)^(4*3), or

= ($200)(1.00875)^(12) = $200(1.11) = $222.04

The compound amout after 4 years (12 compounds) will be $222.04.