Saxon wants to take a trip to Ireland. She plans to deposit $510 at the beginning of each quarter into an investment with a 2.95% interest rate, compounded quarterly. How much will she have in the account after 8 years?

Question

anonymous · Answer

=  $645.2

anonymous · Answer

Equation from wikipedia.
$$FV = PV(1+i)^n$$
Where FV = Future value (the value you end up with)
PV= Present Value (the value you have now)
i = interest rate (be careful, this should be converted into decimal form)
n = times compounded (1 means it's compounded once a year)

anonymous · Answer

i got 4201.70 is tat correct?

anonymous · Answer

wait... I used the wrong formula.  It didnt take the number of years into account.

anonymous · Answer

The formula for compound quarterly in 8 yrs:
A =   P  (1+  r/ 4 ) ^ 32

anonymous · Answer

Just plug all numbers in!

anonymous · Answer

Thanks Chlorophyll. Kirihara, http://en.wikipedia.org/wiki/Compound_interest Section 2.2 on the wikipedia page explains the formula used.

anonymous · Answer

thanks guys !