Pt = Po * (r + 1)^n.
Pt = value after time t(20yrs),
Po = Initial investment,
r = Quarterly percentaqge rate(QPR)
expressed as a decimal,
n = the number of compounding periods.
r = 0.25 * 5.9 = 1.475 % = 0.01475,
n = 20 yrs / 0.25 yr = 80.
Pt = 4000 * (0.01475 + 1)^80 = 12905.80.
To save for their retirement, a couple deposits $4000 in an account that pays 5.9% annual interest compounded quarterly. What will be the value of their investment after 20 yr?
1 answer