You just deposited $2,500 in a bank account that pays a 12% nominal interest rate,compounded quarterly.If you also add another $5,000 to the account one year (12 months) from now and another $7,500 to the account 2 years from now,how much will be in the account 3 years (12 quarters) from now?

Question

Quizplus · Accepted Answer

First, we need to find the effective nominal interest rate per quarter:
i = 12% / 4 = 3%
Next, we can use the compound interest formula to find the balance after 3 years:
FV = PV x (1 + i)^n
PV = $2,500
n = 12 quarters
FV = $2,500 x (1 + 0.03)^12 = $3,503.56
Then, we can add the future deposits to the balance:
FV = $3,503.56 + $5,000 x (1 + 0.03)^8 + $7,500 x (1 + 0.03)^16 = $18,339.57
Therefore, the answer is B.

You Just Deposited $2,500 in a Bank Account That Pays