Find the value of $1,300 left on deposit for 10 years at an annual rate of 6%, compounded quarterly.
A)$2,358.22
B)$2,367.22
C)$2,359.62
D)$2,360.22
E)$2,501.72

Question

Quizplus · Accepted Answer

The formula for compound interest is $A = P(1 + \frac{r}{n})^{nt}$, where $A$ is the amount of money accumulated after n years, including interest, $P$ is the principal amount (the initial amount of money), $r$ is the annual interest rate (decimal), $n$ is the number of times that interest is compounded per year, and $t$ is the time the money is invested for in years. Plugging in the given values: $P = 1300$, $r = 0.06$, $n = 4$ (since the interest is compounded quarterly), and $t = 10$, we get $A = 1300(1 + \frac{0.06}{4})^{4*10}$, which calculates to approximately $2,358.22.

Find the Value of $1,300 Left on Deposit for 10