Problema Solution
Find the accumulated value of an investment of 45,000 for 10 years that is invested in an account the pays 3.75% interest compounded quarterly. Show your computation.
Answer provided by our tutors
P = $45,000.00 the principal
r = 0.0375 or 3.75% annual rate
m = 4 compounding period per year (compounded quarterly)
i = r/4 = 0.0375/4 = 0.009375 interest rate per period
t = 10 years number of years
n = t*m = 10*4 = 40 total number of compounding periods
A = the future value
A = P(1 + i)^n
A = 45000(1 + 0.009375)^40
........
click here to see the step by step computation
........
A = $65,360.34
The accumulated value after 10 years will be $65,360.34.