Question

Solve the problem.

How much money needs to be invested now to get $2000 after 4 years at 8%
compounded quarterly? Express your answer to the nearest dollar.
A) $584
B) $1457
C) $1848
D) $2746

Answer 1

A) $584

Explanation:

Compounded quarterly means it is compounded 4 times a year.

This means that the amount its compounded 16 times during this period.

to compound the money you must multiply it by 1+ the rate its being compounded so here it is .08.

work: (584 * 1.08)= 630.72

630.72 *1.08= 681.1

... repeat until done 16 times and $2000 is reached.