Question

If $360 dollars is invested at an interest rate of 4% per year and is compounded quarterly, how much will the investment be worth in 18 years

Answer 1

Fv=360(1+0.04/4)^4*18
Fv=360(1+0.01)^72
Fv=736.96

Answer 2

Answer:

Principal (P)= $ 360

Rate of Interest = 4 %

Time =18 years

Interest is Compounded Quarterly.

In a year there are 4 Quarters.So, Time =72 Quarters

New Rate of Interest

                      $=\frac{4}{4}\\\\=1 \text{percent}$%

Amount after 18 years

                  $=P \times [1+\frac{R}{100}]^n\\\\=360 \times [1+\frac{1}{100}]^{72}\\\\=360 \times (1.01)^{72}\\\\=360 \times 2.0470\\\\=736.955$

        =$ 737.96