Brad has $1,000 a savings account which earns 5% interest compounded quarterly. He made no additional withdrawals or deposits. What was the amount in the account at the end of the second quarter?

Answer 1

You could use the canned formulas but use the basic knowledge of interest rates etc.

The quarterly interest is .05/4 = .0125

So, at the end of the first quarter he will have 1.0125(1000) = $1,012.50

At the end of the second quarter, he will have 1.0125($1,012.50) = $1,025.16