Use
P(1+r)^n
Since interest is compounded quarterly,
the interest rate has to be divided by 4 to get the quarterly rate. The number of periods (years) has to be multiplied by 4 to get quarters.
P=500
R=(1+0.0425/4)
n=12*4=48
So
500*(1+0.0425/4)^48
=830.41
determine the amount of an investment if $500 is invested at an interest rate of 4.25% compounded quarterly for 12 years?
1 answer
1 answer