You deposit $1,000 for 4 years at an interest rate of 2%. If the interest is compounded quarterly. how much money do you have after the 4 years?

Answer 1

The formula is S = S_o(1 + I/n)^nt

where S = total sum of money at the end of the time

S_o = the amount of money inititally deposited = $1000

I = annual interest rate = .02

n = number of periods per year = 4

t = number of years = 4

So, S = $1000(1 + .02/4)⁽⁴⁾⁽⁴⁾ = $1083.07