You wish to deposit $7000 in an account at the bank. The
bank pays interest at a nominal annual rate of 10% compounded quarterly. What
is the future value in the account after 7 years?
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Using the compound interest formula, we have thatP = $7000, r = 10/100 = 0.1, n = 4, t = 7. Therefore,
A is deposit value in future
A = P (1+ r/n)^nt
A = 7000(1+ 0.1/4)^(4)(7)
A = 7000 (1.025)^28
A = 7000 (1.996)
A = $13975 approx
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