Use the compound amount formula $A = P \left( 1 + \frac { r } { n } \right) ^ { \mathrm { nt } }$ to find the accumulated amount on an investment of $\$ 2000$, invested at an interest rate of $6 \%$ for 10 years, if the interest is compounded quarterly.
A)$3,628.04
B)$20,300.00
C)$16,543.61
D)$3,612.22

Question

Quizplus · Accepted Answer

The correct calculation using the formula $A = P \left( 1 + \frac { r } { n } \right) ^ { \mathrm { nt } }$ with $P = 2000$, $r = 0.06$, $n = 4$ (since the interest is compounded quarterly), and $t = 10$ gives $A = 2000 \left( 1 + \frac { 0.06 } { 4 } \right) ^ { 4 \times 10 } = 2000 \left( 1 + 0.015 \right) ^ { 40 } = 2000 \times (1.015)^{40} \approx \$3,628.04$.

Use the Compound Amount Formula A=P(1+rn)ntA = P \left( 1 + \frac { r } { n } \right) ^ { \mathrm { nt } }A=P(1+nr​)nt

Use the Compound Amount Formula $A = P \left( 1 + \frac { r } { n } \right) ^ { \mathrm { nt } }$