Question

How much money will you have in 6 years if you invest $3000 at a 3.1% annual rate of interest compounded quarterly?

Answer 1

Result

The interest is $203670 and the amount is $206670.

Explanation

STEP 1: Convert interest rate of 3.1% per day into rate per year.

rate per year = rate per day⋅365=3.1%⋅365=1131.5%

STEP 2: Find an interest by using the formula I=P⋅i⋅t, where I is interest, P is total principal, i is rate of interest per year, and t is total time in years.

In this examplee P = $3000, i = 1131.5% and t = 6 years, so

III=P⋅i⋅t=3000⋅11.315⋅6=203670

STEP 3: Find an amount by using the formula A=P+I.

Since P = $3000 and I = $203670 we have

AAA=P+I=3000+203670=206670