I am not quite sure what to do help please?
Use the compound interest formula. given three of the quantities, A, P, r and t, find the remaining one.

question:
When his first child was born a father put $3000 in a savings account that pays 4% annual interest, Compounded quarterly. How much will be in the account on the child's 18th birthday.

thanks :)

Question

I am not quite sure what to do help please?
Use the compound interest formula. given three of the quantities, A, P, r and t, find the remaining one.

question:
When his first child was born a father put $3000 in a savings account that pays 4% annual interest, Compounded quarterly. How much will be in the account on the child's 18th birthday.

thanks :)

campbell_st · Answer

P = 3000 r = 0.01  since the interest is annual but compounded quarterly n = 18 x 4 =72

so A = 3000(1+0.01)^72 will give the future value

anonymous · Answer

oh okay so since its quarterly over 18 years you have to multiply the two. that makes sense! thanks

but where did you get the .01 from wouldn't it be .04?

campbell_st · Answer

the interest is annual.... so to get the quarterly rate... divide the annual by 4...

campbell_st · Answer

and the rate is normally expressed as a decimal or fraction when calculating

anonymous · Answer

oh okay thanks