Question

You deposit $6,700 in a money-market account that pays an annual interest rate of 3.3%. The interest is compounded quarterly. How much money will you have after 4 years? a. $7,629.15 c. $7,155.18 b. $7,637.19 d. $7,641.29

Answer 1

3.3% per year is 0.825% per quarter, and 4 years is 16 quarters, so your result will be $6,700 x (1.00825)16 = $7,641.29, a total return of just over 14%.

:)