Answer:
The value of the investment would be $16,035.87 in 12 quarters from now
Explanation:
The value of $2,500 after four quarters can be determined with the below formula:
FV=PV*(1+r/t)^N*t
FV is the future value of the investment, the unknown
PV, the present value of the investment is the amount invested.
r is the rate of return of 4%
t is the number of times interest is paid annually,4 times in this case
After the first four quarters, the worth of the investment is shown thus:
FV=$2500*(1+4%/4)^1*4
FV=$2500*(1+1%)^4
FV=$2,601.51
After that $5000 was added to $2,601.51 making $7,601.51 which was reinvested to yield the below:
FV=$7,601.51*(1+ in 4%/4)^1*4
FV=$7,601.51*(1+1%)^4
FV=$7910.16
Then $7,500 was added to $7,910.16 which turns $15,410.16
FV=$15,410.16*(1+4%/4)^1*4
FV=$15,410.16*(1+1%)^4
FV=$16,035.87
