Use the compound interest table to calculate the compound interest on Corrine s principal of $3,000 at 6% compounded quarterly for two years. \(\begin{array}{rccccccc}
\hline n & 0.5 \% & 1 \% & 1.5 \% & 2 \% & 3 \% & 4 \% & 5 \% \
\hline 1 & 1.00500000 & 1.01000000 & 1.01500000 & 1.02000000 & 1.03000000 & 1.04000000 & 1.05000000 \
2 & 1.01002500 & 1.01010000 & 1.03022500 & 1.04040000 & 1.06090000 & 1.08160000 & 1.10250000 \
3 & 1.01507513 & 1.03030100 & 1.04567837 & 1.06120800 & 1.09272700 & 1.12486400 & 1.15762500 \
4 & 1.02015050 & 1.04060401 & 1.06136355 & 1.08243216 & 1.12550881 & 1.16985856 & 1.21550625 \
5 & 1.02525125 & 1.05101005 & 1.07728400 & 1.10408080 & 1.15927407 & 1.21665290 & 1.27628156 \
6 & 1.03037751 & 1.06152015 & 1.09344326 & 1.12616242 & 1.19405230 & 1.26531902 & 1.34009564 \
7 & 1.03552940 & 1.07213535 & 1.10984491 & 1.14868567 & 1.22987387 & 1.31593178 & 1.40710042 \
8 & 1.04070704 & 1.08285671 & 1.12649259 & 1.17165938 & 1.26677008 & 1.36856905 & 1.47745544 \
9 & 1.04591058 & 1.09368527 & 1.14338998 & 1.19509257 & 1.30477318 & 1.42331181 & 1.55132822 \
10 & 1.05114013 & 1.10462213 & 1.16054083 & 1.21899442 & 1.34391638 & 1.48024428 & 1.62889463
\end{array}\) $$\begin{array} { c }
\hline 6 \% \
\hline 1.06000000 \
1.12360000 \
1.19101600 \
1.26247696 \
1.33822558 \
1.41851911 \
1.50363026 \
1.59384807 \
1.68947896 \
1.79084770
\end{array}$$
A) $285.39
B) $379.48
C) $1,781.54
D) $3,379.49

Question

Use the compound interest table to calculate the compound interest on Corrine s principal of $3,000 at 6% compounded quarterly for two years. \(\begin{array}{rccccccc}
\hline n & 0.5 \% & 1 \% & 1.5 \% & 2 \% & 3 \% & 4 \% & 5 \% \
\hline 1 & 1.00500000 & 1.01000000 & 1.01500000 & 1.02000000 & 1.03000000 & 1.04000000 & 1.05000000 \
2 & 1.01002500 & 1.01010000 & 1.03022500 & 1.04040000 & 1.06090000 & 1.08160000 & 1.10250000 \
3 & 1.01507513 & 1.03030100 & 1.04567837 & 1.06120800 & 1.09272700 & 1.12486400 & 1.15762500 \
4 & 1.02015050 & 1.04060401 & 1.06136355 & 1.08243216 & 1.12550881 & 1.16985856 & 1.21550625 \
5 & 1.02525125 & 1.05101005 & 1.07728400 & 1.10408080 & 1.15927407 & 1.21665290 & 1.27628156 \
6 & 1.03037751 & 1.06152015 & 1.09344326 & 1.12616242 & 1.19405230 & 1.26531902 & 1.34009564 \
7 & 1.03552940 & 1.07213535 & 1.10984491 & 1.14868567 & 1.22987387 & 1.31593178 & 1.40710042 \
8 & 1.04070704 & 1.08285671 & 1.12649259 & 1.17165938 & 1.26677008 & 1.36856905 & 1.47745544 \
9 & 1.04591058 & 1.09368527 & 1.14338998 & 1.19509257 & 1.30477318 & 1.42331181 & 1.55132822 \
10 & 1.05114013 & 1.10462213 & 1.16054083 & 1.21899442 & 1.34391638 & 1.48024428 & 1.62889463
\end{array}\) $$\begin{array} { c } 
\hline 6 \% \
\hline 1.06000000 \
1.12360000 \
1.19101600 \
1.26247696 \
1.33822558 \
1.41851911 \
1.50363026 \
1.59384807 \
1.68947896 \
1.79084770
\end{array}$$
A) $285.39
B) $379.48
C) $1,781.54
D) $3,379.49

Quizplus · Accepted Answer

Since the interest is compounded quarterly, we need to find the equivalent rate and period. The annual rate is 6%, so the quarterly rate is 1.5% (6% divided by 4). For two years, with quarterly compounding, we have 8 periods (2 years times 4 quarters per year). Looking at the table for 1.5% and 8 periods, the factor is 1.12649259. Multiplying this factor by the principal amount of $3,000 gives us the future value: $3,000 * 1.12649259 = $3,379.48. The compound interest is the future value minus the principal, so $3,379.48 - $3,000 = $379.48.

Use the Compound Interest Table to Calculate the Compound Interest