Problema Solution
Mrs. Bratty invests 13,000 at 5% interst rate per year, compounded quarterly. How much money will she get back after 9 years?
Answer provided by our tutors
P = $13,000 is the principal
r = 0.05 or 5% annual rate
m = 4 compounding period per year (compounded quarterly)
i = 0.05/4 interest rate per period
t = 9 years is the time in years
n = t*m = 9*4 = 36 is the total number of compounding periods
A = the future value
The formula for the future value is:
A = P(1 + i)^n
A = 13000(1 + 0.05/4)^36
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click here to see the step by step calculation for A
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A = $80,961.71
The future value in 9 years will be $80,961.71.