Final answer:
The statement is False. When you invest money for 10 years at 8% interest, compounded quarterly, you are effectively investing money for 40 three-month periods, during which you receive 2% interest each quarter.
Step-by-step explanation:
The statement is False.
When you invest money for 10 years at 8% interest, compounded quarterly, you are effectively investing money for 40 three-month periods, during which you receive 2% interest each quarter. In compound interest calculations, the interest is usually expressed as an annual rate. So, the interest rate per period can be calculated by dividing the annual interest rate by the number of compounding periods in a year. In this case, the annual interest rate is 8% and there are 4 compounding periods in a year, so the interest rate per period is 8% / 4 = 2%.
To calculate the future value of the investment, you would use the formula:
FV = P(1 + r/n)^(nt)
Where FV is the future value, P is the principal (initial investment), r is the interest rate per period, n is the number of compounding periods per year, and t is the number of years.
Plugging in the values, the formula becomes:
FV = P(1 + 0.02)^(4*10)
So the correct answer is False, you would receive 2% interest each period.