You are offered an investment opportunity which pays an annual interest rate of 2.6% for the...

You are offered an investment opportunity which pays an annual interest rate of 2.6% for the next five years. Your initial deposit is $3,000. Assumes interest is compounded quarterly. How much will you have at the end of five years?

	a.	$3,415.05
	b.	$3,807.21
	c.	$3,410.81
	d.	$3,502.32
	e.	$3,098.78

Expert Solution

We use the formula:
A=P(1+r/4)^4n
where
A=future value
P=present value
r=rate of interest
n=time period.

A=3000*(1+0.026/4)^(4*5)

=3000*1.1383494

=$3415.05(Approx)

jeff jeffy answered 2 years ago

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