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Popular Word Problems >

If 800 is invested at an interest rate of 3.75% per year, compounded quarterly, find the value of the investment after 2 years

Solution

I f 800 i s in v es t e d a t an in t eres t r a t e o f 3.75% p er ye a r, co m p o u n d e d q u a r t er l y, f in d t h e v a l u e o f t h e in v es t m e n t a f t er 2 ye a rs

Solution

Amount : 862.01

Solution steps

Translate the problem into an equation:

A = 800 (1 + \frac{0.0375}{4})^{4 \cdot 2}

800 (1 + \frac{0.0375}{4})^{4 \cdot 2} = 862.00609 \dots

Round to the nearest hundredth:

862.01

Amount : 862.01

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