Use Compound Interest Formulas
Use the compound interest formulas A $$A = P \left( 1 + \frac { r } { n } \right) \text { and } A = P e ^ { r t } \text { to solve }$$
-Find the accumulated value of an investment of $900 at 10% compounded quarterly for 5 years.
A)$1474.75
B)$1449.46
C)$1018.27
D)$1350.00

Question

Quizplus · Accepted Answer

The formula for compound interest is $A = P \left(1 + \frac{r}{n}\right)^{nt}$, where $P$ is the principal amount ($900), $r$ is the annual interest rate (10% or 0.10), $n$ is the number of times the interest is compounded per year (quarterly, so 4 times), and $t$ is the time the money is invested for (5 years). Plugging in the values: $A = 900 \left(1 + \frac{0.10}{4}\right)^{4*5} = 900 \left(1 + 0.025\right)^{20} = 900 \left(1.025\right)^{20} ≈ $1474.75$.

Use Compound Interest Formulas Use the Compound Interest Formulas A A =

Use Compound Interest Formulas
Use the Compound Interest Formulas A A =