Question

You deposit $6,700 in a money-market account that pays an annual interest rate of 3.3%.The interest is compounded quarterly. how much money will you have after 4 years?

Answer 1

a period of interest is 4 times in one year; after 4 years that gives us a total of 16 periods that this thing is compounding.

since the interest rate is an annual value; the actual interest for any given period is 1/4 of the annual rate.

when you understand these principles; you are simply asking a compounded interest question that has a rate of:3.3/4 % for 16 time periods.