Math Question Help Needed

Accounting
Tutor: None Selected Time limit: 1 Day

If $100 is placed in an account that earns a nominal 4% compounded quarterly, what will it be worth in 5 years?

Jun 5th, 2015

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Jun 5th, 2015

Using the compound interest formula, we have that
P = $100, r= 4/100= 0.04, n=4, t=5 , therefore,

A is deposit value in future 

A = P (1+ r/n)^nt

A = 100 (1+ 0.04/4)^(4)(5)

A = 100 (1.01)^20

A = 100 (1.22)

A = $122 approximately

Jun 5th, 2015

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