$1500 is invested at a rate of 10% quarterly. What is the balance at the end of 5 years?

Question

$1500 is invested at a rate of 10% quarterly. What is the balance at the end of 5 years?

Answer 1

A = p(1 + r/n)^nt, where A = amount, p = principal, r = rate, n = number of calculations per year, t = years.

 

A = 1500(1 + 0.1/4)^4·5

A = 1500(1 + 0.025)²⁰

A = 2500(1.025)²⁰

A ≈ 2500(1.63861)

A ≈ 4096.54

 

The balance is $4,096.54.