You just deposited $6,500 in a bank account that pays a 4.0% nominal interest rate,compounded quarterly.If you also add another $5,000 to the account one year (4 quarters)from now and another $7,500 to the account two years (8 quarters)from now,how much will be in the account three years (12 quarters)from now?

Question

Quizplus · Accepted Answer

The correct answer is A because the future value of the deposit is calculated using the formula FV = PV * (1 + r/n)^(nt), where PV is the present value, r is the nominal interest rate, n is the number of times per year that the interest is compounded, and t is the number of years. In this case, PV = $6,500, r = 4.0%, n = 4, and t = 3. Plugging these values into the formula, we get FV = $6,500 * (1 + 0.04/4)^(4*3) = $20,543.18.

You Just Deposited $6,500 in a Bank Account That Pays