Question

I know how to do simple interest on a loan but how would I figure compound interest on a loan $8,000 invested for one year at 6% compounded quarterly ? with rounded to the nearest dollar thanks in advance for explaining :)

Answer 1

I knew it was coming :)

you are going to do 6% a year compounded quarterly.

that means you will do 6%/4 each time
that is 1.5% every three months.

that means every three months you will multiply whatever is in the bank by 1.015

You do this four times in a year so you multiply the original amount by
1.015 *1.015*1.015*1.015
or 1.015^4
which is
1.06136

\So multiply that by 8,000
=8490.91
to the nearest dollar that is
8,491
so you made 491 in interest that year.