Question

Use the compound interest formula, . If $10,000 is invested at 2 percent quarterly for 5 years, what is the amount at the end of the term?

Answer 1

The answer to this question is either 6.16778% or 6%

Answer 2

For this case we have the following equation:
 P (t) = P * (1 + r / n) ^ (n * t)
 Where,
 P: initial investment
 r: interest
 n: periods
 t: time
 For 5 years we have:
 P (5) = 10000 * (1 + 0.02 / 4) ^ (4 * 5)
 P (5) = 11048.96 $
 Answer:
 The amount at the end of the term is:
 P (5) = 11048.96 $