Question

If you took $1,000 and put it into an interest-bearing savings account compounding quarterly at 3%, how much would your fund be worth at the end of one year?

Answer 1

$1007.50

Explanation:

Compounded Interest Rate Formula: A = P(1 + r/n)^t

We are given p, r, n, and t. Simply plug them into the formula:

A = 1000(1 + 0.03/4)¹

A = 1000(1.0075)¹

A = 1000(1.0075)

A = 1007.50