Question

An investment of $7,650 earns interest at the rate of 5% and is compounded quarterly. What is the accumulated value of the investment at the end of 9 years?

a.
$11,964.17
b.
$11,867.66
c.
$9,338.56
d.
$8,554.94

Answer 1

$11,964.17

Explanation:

Answer 2

The needed formula is

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

We are looking for A.

Let r = 0.05

Let n = 4

Let p = 7650

Let t = 9

A = 7650(1 + 0.05/4)^(4•9)

You can now finish. So, solve for A.

In other words, simplify the right side of the equation to find your answer.