Question

A young graduate looks to save money to buy a house 8.00 years from today. He is somewhat conservative and will invest his money in a bond fund that pays 5.00% APR with quarterly compounding. The graduate invests $10,880.00 today. How much will his account be worth in 8.00 years?

Answer 1

Answer:

amount = $10923.60

Explanation:

given data

time t = 8 year

rate r = 5 %

principal P =  $10,880.00

solution

we will use here amount formula that is

amount = principal ×  $(1+\frac{r}{100})^{t}$       ...............................1

put here value we get and we get the amount that is

amount = $10880 × $(1+\frac{0.05}{100})^{8}$

amount = $10923.60

so his account be worth in 8.00 years is $10923.60