Question
You deposit $6,700 in a money-market account that pays an annual interest rate of 3.3%. The interest is compounded quarterly. How much money will you have after 4 years?
Answers
Damon
how many quarter years in 4 years
4*4 = 16 quarters
quarterly interest rate = .033/4 = .00825
so every quarter we multiply what we have by 1.00825
16 times we do that so
1.00825^16 = 1.140490549
now multiply that by the starting amount 6700
= $7,641.29
4*4 = 16 quarters
quarterly interest rate = .033/4 = .00825
so every quarter we multiply what we have by 1.00825
16 times we do that so
1.00825^16 = 1.140490549
now multiply that by the starting amount 6700
= $7,641.29