Question

"After 6 years, what is the total amount of a compound interest investment of $35,000 at 4% interest, compounded quarterly?"

I tried to solve this question and I thought I did it right but my answer matched none of the multiple-choice answers I was given, so apparently I did something wrong.

Answer 1

I think the formula I'm supposed to use is the Compound Interest Formula:
\[A = P(1 + \frac{ r }{ n })^{nt}\]

Where A = total, P = principal, t = time (years), r = annual interest rate, and n = number of compounds per year

Answer 2

But every time I plug the values in I get 89,000 something, but my choices are as follows:
A. $37,153.21
B. $39,438.88
C. $44,440.71
D. $56,295.30

Answer 3

show me how you filled in the formula

Answer 4

Oh wait!! I realize what I did wrong! Instead of plugging in r/n inside the parenthesis, I only plugged in r.

Answer 5

Let me try it one more time and I'll see if it works.

Answer 6

my idea was you didnt convert 4% correctly as .04 ... but that was just a guess

Answer 7

I got it! Thank you for your help though (:

Answer 8

C, 44,440

http://www.wolframalpha.com/input/?i=%2435000+%281%2B0.04%2F4%29^%284*6%29

Answer 9

i knew you could :)