$5,000 invested at 6%, compounded quarterly, will be worth how much after 5 years?

Name: $5,000 invested at 6%, compounded quarterly, will be worth how much after 5 years?
Brand: Quizplus
Rating: 4.7 (41 reviews)

Question

Quizplus · Accepted Answer

The formula for compound interest is A = P(1 + r/n)^(nt), where P is the principal amount ($5,000), r is the annual interest rate (0.06), n is the number of times interest is compounded per year (4 for quarterly), and t is the number of years (5). Plugging in these values gives A = 5000(1 + 0.06/4)^(4*5) = 5000(1.015)^20 ≈ $6,734.

$5,000 Invested at 6%, Compounded Quarterly, Will Be Worth How