Question

John invests $3,000 into an account that earns 4.7% interest compounded quarterly. Write an equation and us it to find the value of John's investment after 12 years

Answer 1

Answer:

The equation is;

A = 9,000(1 + 0.047/4)^48

The value is

$15,767.28

Step-by-step explanation:

Here we want to find the value of an investment after 12 years, given its interest rate;

Mathematically the amount which is the value would be;

A = I( 1 + r/n)^nt

Where A is the amount in 12 years

I is the initial amount invested = $3,000

r is the interest rate = 4.7% = 4.7/100 = 0.047

n is the number of times interest is compounded yearly = 4 since it is quarterly ( once every three months)

t is the number of years = 12

Substituting these values, we have

A = 9,000(1 + 0.047/4)^(12^4)

A = 9,000(1 + 0.047/4)^48

The above is the expression

A = 9,000(1 + 0.01175)^48

A = 9,000(1.01175)^48

A = $15,767.28