How many dollars must be invested at 16% compounded quarterly to obtain $10,000 in 5 years?

$4190
$4566
$4400
$4760

Question

How many dollars must be invested at 16% compounded quarterly to obtain $10,000 in 5 years?

	$4190
	$4566
	$4400
	$4760

amistre64 · Answer

how many periods does it compound for?

anonymous · Answer

4 I think so 20 total

amistre64 · Answer

good, 4 times a year for 5 years is 20 periods entotal

now, 16% is a yearly rate, how much for a quarter?

amistre64 · Answer

or rather, what is the period interest rate :)

anonymous · Answer

4% a quarter

amistre64 · Answer

good, 4% a period at 20 periods

A(1+.04)^(20) should equal 10000

can you solve for the Amount needed?

anonymous · Answer

I think so, would I just plug in and check for A?

amistre64 · Answer

that is one option available to you ..

or just divide the 10000 by (1.04)^(20)

anonymous · Answer

Okay! I got B

amistre64 · Answer

anonymous · Answer

Thank you!

amistre64 · Answer

youre welcome