An investment broker deposits 1000 into an account that earns 12% annual interest compounded quarterly. What is the value of the investment after 2 years?

Solution

Solution

Amount : 1266.77

Solution steps

Translate the problem into an equation:

A = 1000 (1 + \frac{0.12}{4})^{4 \cdot 2}

1000 (1 + \frac{0.12}{4})^{4 \cdot 2} = 1266.77008 \dots

Round to the nearest hundredth:

1266.77

Amount : 1266.77

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