You deposit $750 in an account that earns 5% interest compounded quarterly. Show and solve a function that represents the balance after 4 years.
The Accumulated Value (A) of a Balance B, with an interest rate per compounding period (i) for n periods is:
A = B(1 + i)^n
Givens
Using our compound balance interest calculator, we get the accumulated value A:
$914.92
The Accumulated Value (A) of a Balance B, with an interest rate per compounding period (i) for n periods is:
A = B(1 + i)^n
Givens
- 4 years of quarters = 4 * 4 = 16 quarters. So this is t.
- Interest per quarter = 5/4 = 1.25%
- Initial Balance (B) = 750.
Using our compound balance interest calculator, we get the accumulated value A:
$914.92