What is the future value of $1,000, placed in a saving account for four years if the account pays 8%, compounded quarterly?
A)$1,320.45
B)$1,360.50
C)$1,372.80
D)None of the above

Question

Quizplus · Accepted Answer

Using the formula for compound interest:

A = P(1 + r/n)^(nt)

Where: 
A = final amount (future value)
P = principal (initial amount)
r = annual interest rate
n = number of times interest is compounded per year
t = time in years

Plugging in the values given:

A = 1000(1 + 0.08/4)^(4*4) 
A = 1000(1.02)^16 
A = $1,372.80

Therefore, the future value after four years is $1,372.80. Answer choice C is correct.

What Is the Future Value of $1,000, Placed in a Saving