Assume that on 1 January 2011 you deposit $1000 into a savings account that pays 8% p.a.If the bank compounds interest quarterly,how much will you have in your account on 1 January 2014?
A)$1268.24
B)$1349.13
C)$1301.15
D)$1483.09

Question

Quizplus · Accepted Answer

The correct answer is A because the future value of the deposit can be calculated using the formula FV = PV * (1 + r/n)^(n*t), where PV is the present value, r is the annual interest rate, n is the number of compounding periods per year, and t is the number of years. In this case, PV = $1000, r = 8%, n = 4 (since the interest is compounded quarterly), and t = 3 (since the deposit is held for 3 years). Plugging these values into the formula, we get FV = $1000 * (1 + 0.08/4)^(4*3) = $1268.24.

Assume That on 1 January 2011 You Deposit $1000 into a Savings