Paula invests $\$10,\!000$ at the start of a 5 year period at an interest rate of $10\%$. At the end of those 5 years, how much is her investment worth if the interest is compounded quarterly? Express your answer as a dollar value rounded to the nearest cent.

Guest Apr 9, 2018

#1**0 **

FV = PV [1 + R]^N [Not sure if it is $1,000 or $10,000] . I will calculate it for $1,000 and if it is $10,000, then just multiply the answer by 10.

FV = 1,000 [1 + 0.10/4]^(5*4)

FV = 1,000 x [ 1.025]^20

FV =1,000 x 1.63861644.....

**FV =$1,638.62 - what Paula will have in 5 years @ 10% compounded quarterly. If it is $10,000, then she will have =$16,386.16**

Guest Apr 9, 2018

edited by
Guest
Apr 9, 2018