Step-by-step explanation:
you add 9% to a number by multiplying that number by 1.09.
because adding 9% gives us in the end 109% of the original amount.
anyway, the formula for quarterly compounded interest is
Cq = P [ (1+r)^(4*n) – 1 ]
P is the starting principal amount
r is the interest rate per quarter (= interest rate / 4)
n would be the number of years (= 1 in our case).
so, the interest after 1 year is
12500((1 + 0.09/4)⁴ - 1) = 12500(1.0225⁴ - 1) =
= 12500 × 0.093083319 = $1,163.541485 ≈ $1,163.54
