Answer to Question #178876 in Financial Math for David

Question

Gita invests $2642 in a savings account for 3 years that earns 3.2% compounded quarterly.

How much interest will she have earned at the end of 3 years?

Answer 1

$A=P(1 +\frac {r} {n}) ^{nt}$

$A=\$2,642(1+\frac {0.032}{4})^{4×3}$

$A=\$2,642 (1+0.008)^{12}$

$A=\$2,907.09$

Interest =$\$2,907.09-\$2,642=\$265.09$