If a savings account pays interest at 4% compounded quarterly, then the amount of $1 left on deposit for 5 years would be found in a table using
A) 5 periods at 4%.
B) 5 periods at 1%.
C) 20 periods at 4%.
D) 20 periods at 1%.

Question

Quizplus · Accepted Answer

When interest is compounded quarterly, the annual interest rate is divided by 4, and the number of years is multiplied by 4. Therefore, for a 4% annual interest rate compounded quarterly over 5 years, it's 20 periods at 1%.

If a Savings Account Pays Interest at 4% Compounded Quarterly