you have $1000 you are investing in a money market fund that advertises 6% annually, compounded quarterly. how much money you will have saved for your purchase after 10 years
+3454 Our compounded-interest formula is
A = P(1+r/n)nt
Where:
A = amount of money accumulated after n years, including interest.
P = principal amount (the initial amount you borrow or deposit)
r = annual rate of interest (as a decimal)
n = number of times the interest is compounded per year
t = number of years the amount is deposited or borrowed for.
Let's put these numbers into our formula to find how much money we'll have after 10 years!
A = P(1+r/n)nt
A = 1000(1+(.06)/(4))(4)(10) ----The interest is compounded quarterly, so 4 times a year (n=4)
A = 1000(1+.015)40
A = 1000(1.015)40
A = 1000(1.8140184086689515)
A = 1814.0184086689515
Round up
A = 1814.02
After 10 years, you will have $1814.02!
Formula source: https://qrc.depaul.edu/StudyGuide2009/Notes/Savings%20Accounts/Compound%20Interest.htm
+3454 Our compounded-interest formula is
A = P(1+r/n)nt
Where:
A = amount of money accumulated after n years, including interest.
P = principal amount (the initial amount you borrow or deposit)
r = annual rate of interest (as a decimal)
n = number of times the interest is compounded per year
t = number of years the amount is deposited or borrowed for.
Let's put these numbers into our formula to find how much money we'll have after 10 years!
A = P(1+r/n)nt
A = 1000(1+(.06)/(4))(4)(10) ----The interest is compounded quarterly, so 4 times a year (n=4)
A = 1000(1+.015)40
A = 1000(1.015)40
A = 1000(1.8140184086689515)
A = 1814.0184086689515
Round up
A = 1814.02
After 10 years, you will have $1814.02!
Formula source: https://qrc.depaul.edu/StudyGuide2009/Notes/Savings%20Accounts/Compound%20Interest.htm
