Question

Kyle Carlson invested $10,000 in a savings account paying 12% interest compounded quarterly. Assuming that he makes no withdrawals, how much interest will he earn during the second quarter of the first year?

Answer 1

Step-by-step explanation:

Initial deposit = $10,000

Interest = 12% compounded quarterly

Quarterly interest = 12/4 = 3%

Interest earned for quarter 1 = 10,000 x 3% = $300

Deposit value after quarter 1 = 10,000 + 300 = $10,300

Interest earned for quarter 2 = 10,300 x 3% = $309