Question

If $2940 is invested at 3.2% compounded quarterly, how much is in the account after 8 years?

Answer 1

Answer:

The future value is $3793.776

Step-by-step explanation:

Given

$PV = 2940$ --- present value

$r = 3.2\%$ --- rate

$t = 8$ --- time

$n = 4$ --- quarterly

Required

Determine the future value

This is calculated using:

$FV = PV(1 + \frac{r}{n})^{nt$

So, we have:

$FV =2940 * (1 + \frac{3.2\%}{4})^{4*8$

$FV =2940 * (1 + \frac{3.2}{400})^{32$

$FV =2940 * (1 + 0.008)^{32$

$FV =2940 * (1.008)^{32$

$FV =2940 * 1.2904$

$FV =3793.776$