help with compound interest

Question

how do I found the compound interest if it is compounded quarterly.  The principal is $1000 and interest rate is 6%.

 

I know the rate would be 6% divided by 4 = 1.5% but I for some reason cannot figure out the term so I can use the compound table.

 

thanks

Answer 1

I think this depends on whether you want to calculate each quarter. If you begin with $1000 x 0.06 = $1060 This is your first quarter.

 

You then use that answer to figure the second quarter $1060 x 0.06 = $63.60 to be added to $1060 = $1123.60

This is your second quarter.

 

In the 3rd quarter you calculate $1123.60 x 0.06 = $67.42 added to $1123.60 = $1191.02 This is your 3rd quarter.

 

For you 4th quarter you calculate $1191.02 x 0.06 = $71.46 added to $1191.02 = $1262.48

 

This is the long way around, but is just as fast. Otherwise use 1000(1+0.06/4)4

Answer 2

A= 1000(1+.06/4)^4*t

 

Calculate A ,given the value of t.