19.03.2023 - 14:08

If you invest $1,000 today in a security paying 8 percent compounded quarterly, how much will the investment be worth seven years from today?

Question:

If you invest $1,000 today in a security paying 8 percent compounded quarterly, how much will the investment be worth seven years from today?

Answers (1)
  • Darlene
    April 11, 2023 в 12:48
    The investment will be worth $1,634.49 seven years from today. To calculate this, we need to use the formula for compound interest: A = P(1 + r/n)^(nt) Where: A = the final amount P = the principal (initial investment) r = the annual interest rate (8%) n = the number of times the interest is compounded per year (4 for quarterly) t = the time in years (7) Plugging in the numbers, we get: A = 1000(1 + 0.08/4)^(4*7) = $1,634.49 So, with an initial investment of $1,000 and a compounded interest rate of 8% quarterly, the investment will be worth $1,634.49 after seven years.
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