If a savings account pays interest at 4% compounded quarterly, then the amount of $1 left on deposit for 8 years would be found in a table using
A)8 periods at 4%.
B)8 periods at 1%.
C)32 periods at 4%.
D)32 periods at 1%.

Question

Quizplus · Accepted Answer

Since the interest is compounded quarterly, there are 4 compounding periods per year. Therefore, for 8 years, there are 32 periods (8 years * 4 periods per year). The interest rate per period is 1% (4% annual rate / 4 periods per year).

If a Savings Account Pays Interest at 4% Compounded Quarterly