ECONOMICS
COMPOUND INTEREST
Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]

What principal will amount to $4500 if invested at 4% interest compounded quarterly for 5 years?

$3463.04


$3366.58


$3687.95


$3903.18

Explanation:
Detailed explanation1: So, Compound interest =CI=A−P=5445−4500=945.
Detailed explanation2: For example, 5% interest with quarterly compounding has an effective annual yield of (1 + . 05/4)^41 = . 0509 or 5.09%.
Detailed explanation3: Cq is the quarterly compounded interest. P would be the principal amount. r is the quarterly compounded rate of interest. n is the number of periods.
There is 1 question to complete.