Use the given information to find the compound interest earned by the deposit: A principal of $12,000 invested at 9% compounded quarterly for 1.25 years

Question

 i need help

 

Answer 1

the underlying formula that you want to use here is

A = P(1 + r/n)^nt

for this set of parameters that means taking

A = 12000(1 + 0.09/4)^(4*1*25)

A = 13,412.13

meaning that the interest earned here is

13,412.13 - 12,000 = $1,412.13

Answer 2

A = P(1 + r/n)^nt

A = 12000(1 + .09/4)^4(1.25)

A = 12000(1.0225)⁵

A ≈ 12000(1.117678)

A ≈ $13,412.13

 

i = A - P

i = 13,412.13 - 12000

i ≈ $1412.13