Question
Asked Mar 9, 2019
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Find the amount that results from the given investment. $300

after 3 years invested at 9% compounded quarterly after a period of 3 years:

After 3 years, the investment results in how much $?

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Expert Answer

Step 1

Compound interest:

In compound interest, interest is added back to the principal sum so that interest is earned on that added during the next compounding period. That is, compound interest will give an interest on the interest. The interest payments will change in the time period in which the initial sum of money stays in the bank or with the barrower.

The general formula for compound interest is,

A = P * (1 + r/n)nt

Where:

A is the future value of the investment loan including the loan,

P is the principle amount,

r is the annual interest rate in decimals,

n is the number of times interest is compounded per year,

t is the time of years the money is invested or borrowed.

Step 2

Find the investment results after 3 years:

The invested amount is $300 at 9% compound quarterly interest.

The aim is to know the investment results after 3 years.

Here,

The principal amount is P = $300,

Annual interest rate is r = 9% = 0.09,

The number of times interest is compounded per year is...

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