Question

1f $300 is invested at a rate of 6% per year and is compounded quarterly, how much will the investment be worth in 12 years?Use the compound interest formula A-P(1+r/n)^ntO $145.23O $358.69O $613.04O $618.41

Answer 1

Answer:

$613.04

Explanation:

Amount invested is the principal

Principal, P = $300

Interest rate, r = 6% = 6/100

r = 0.06

Number of times the interest is compounded per year, n = 4

Time, t = 12

Amount after 12 years, A(12) = ?

Amount formula for compound interest is:

$\begin{gathered} A(t)=P(1+\frac{r}{n})^{nt} \\ \\ A(12)=300(1+\frac{0.06}{4})^{4(12)} \\ \\ A(12)=300(1.015)^{48} \\ \\ A(12)=613.04 \end{gathered}$

In 12 years, the investment will be worth $613.04