If $1000 is invested for 2 years at 6% compounded quarterly,then the compound amount at the end of the period is
A) $1120.00.
B) $1123.60.
C) $1126.49.
D) $1141.23.
E) $1593.84.

Question

Quizplus · Accepted Answer

We can use the formula for compound interest:

$$A=P\left(1+\frac{r}{n}\right)^{nt}$$

where $A$ is the amount, $P$ is the principal, $r$ is the annual interest rate (as a decimal), $n$ is the number of times the interest is compounded per year, and $t$ is the time in years.

Plugging in the values given, we get:

$$A = 1000\left(1+\frac{0.06}{4}\right)^{(4)(2)}\approx 1126.49$$

Therefore, the best choice is (C).

If $1000 Is Invested for 2 Years at 6% Compounded