Question

Calculate the future value of $7,000 earning 6% interest compounded quarterly for 7 years. (Round your answer to two decimal places.)

Answer 1

Use the compound interest formula.

Let A = the ending amount

Let P = the principal

Let r = the interest rate

Let n = the amount compounded a year

Let t = time

A = P(1 + r/n) ^(n/t)

Substitute your numbers in

A = $7,000(1 + 0.06/4)^(4/7)

Solve for A

A = $7,059.81