What are the future value and the interest earned if $3000 is invested for 6 years at 8\% compounded quarterly?

opatovaL 2021-05-25 Answered
What are the future value and the interest earned if $3000 is invested for 6 years at 8% compounded quarterly?
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Expert Answer

Aniqa O'Neill
Answered 2021-05-26 Author has 100 answers

The future value of an amount P invested at interest rate r (in decimals), compounded n times per year and for n years is given by:
Here P=3000, r=8%, n=4, t=6
Plugging the values,
Hence the future value is $4825.31
The interest earned is
A=P(1+rn)nt
A=(3000)(1+0.084(4)(6))
A=(3000)(1+0.02)24
A=(3000)(1.02)24
A=(3000)(1.60844)
A=4825.31
I=4825.313000=1825.31

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