To calculate the future value of John's investment after four years with compound interest, we can use the formula:
A = P(1 + r/n)^(nt)
Where:
A = the future value of the investment
P = the principal amount (K400)
r = the annual interest rate (8%)
n = the number of times the interest is compounded per year (4 times for quarterly)
t = the number of years the money is invested for (4 years)
Plug in the values:
A = K400(1 + 0.08/4)^(4*4)
A = K400(1 + 0.02)^16
A = K400(1.02)^16
A = K400 * 1.3596
A = K543.84
Therefore, John will have K543.84 at the end of four years if he invests K400 at the end of four months into an account earning 8% p.a. interest compounded quarterly.
How much will John saves at the end of four years if he decides to invest K400 at the end of four months into an account which pays interest of 8% p.a. compounded quarterly
1 answer