Question

What is the total amount in an investment of $3500 that was compounded quarterly for 8 years at a rate of 5%?
What is the interest that was made on that account mentioned in #7?

Answer 1

Answer:

Principal = 3500

Time = 8 years

We are given that compound quarterly

So, No. of compounds per year = 2

Rate of interest = 5%

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

Substitute the values :

$A=3500(1+\frac{0.05}{2})^{2 \times 2}$

$A=3863.345$

Interest = 3863.345 - 3500 = 363.345

Hence the total amount in an investment of $3500 that was compounded quarterly for 8 years at a rate of 5% is $3863.345 and the interest that was made on that account mentioned is $363.345