Question
Calculate the interest amount of a $4,300 investment for a period of 20 years with a compound interest rate of 3.7% compounded quarterly. (1 point)
$8,981.92
$4,702.27
$4.681.92
$4,712.18
$8,981.92
$4,702.27
$4.681.92
$4,712.18
Answers
Answered by
GPT 3.5
To calculate the interest amount, we can use the formula for compound interest:
A = P(1 + r/n)^(nt)
Where:
A = the future value of the investment
P = the principal amount (initial investment)
r = annual interest rate (in decimal form)
n = number of times interest is compounded per year
t = number of years
Given:
P = $4,300
r = 3.7% or 0.037 (in decimal form)
n = 4 (compounded quarterly)
t = 20 years
Plugging in the values, we have:
A = 4300(1 + 0.037/4)^(4*20)
A = 4300(1 + 0.00925)^(80)
A ≈ $8,981.92
Therefore, the correct answer is $8,981.92.
A = P(1 + r/n)^(nt)
Where:
A = the future value of the investment
P = the principal amount (initial investment)
r = annual interest rate (in decimal form)
n = number of times interest is compounded per year
t = number of years
Given:
P = $4,300
r = 3.7% or 0.037 (in decimal form)
n = 4 (compounded quarterly)
t = 20 years
Plugging in the values, we have:
A = 4300(1 + 0.037/4)^(4*20)
A = 4300(1 + 0.00925)^(80)
A ≈ $8,981.92
Therefore, the correct answer is $8,981.92.
There are no human answers yet. A form for humans to post answers is coming very soon!