If $500 is invested at an interest rate of 3.75% per year, compounded quarterly,

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Mathematics

Description

If $500 is invested at an interest rate of 3.75% per year, compounded quarterly, find the value of the investment after the given number of years. (Round your answers to the nearest cent.)

(a) 1 year
 

(b) 2 years
 

(c) 8 years

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Explanation & Answer

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After 1 year

A= 500 * (1+0.0375/4)^ 4

= $519.02

After 2 years

A= 500 * (1+0.0375/4)^ 8

= $ 538. 75

After 8 years

A= 500 * (1+0.0375/4)^ 32

= $ 673.99

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