Keisha has $3,500 now and plans on investing it in a fund that will pay her 12% interest compounded quarterly. How much will Keisha have accumulated after 2 years? (^PV^of^$1, ^FV^of ^$1, ^PVA^of^$1, and ^FVA^of^$1) (Use appropriate factor(s) from the tables provided.) A) $4,340.00 B) $3,920.00 C) $4,433.80 D) $3,500.00 E) $4,390.40

Question

Quizplus · Accepted Answer

First, we need to convert the interest rate to a quarterly rate: 
12% / 4 quarters = 3% per quarter

Next, we need to find the total number of quarters in 2 years: 
2 years x 4 quarters per year = 8 quarters

Using the compound interest formula, we can find the future value (FV) of the investment: 
FV = PV x (1 + r/n)^(nt) 
where PV = present value, r = interest rate per period, n = number of times compounded per year, and t = number of periods

Plugging in the values: 
FV = $3,500 x (1 + 0.03/4)^(4 x 8) 
FV = $4,433.80

Therefore, Keisha will have accumulated $4,433.80 after 2 years. The best choice is C.

Keisha Has $3,500 Now and Plans on Investing It in a Fund