## Related questions with answers

Use the appropriate compound interest formula to compute the balance in the following accounts after the stated period of time.

$\$ 10,000$ is invested for $10$ years with an $\mathrm{APR}$ of $2 \%$ and quarterly compounding.

Solution

VerifiedTo get the accumulated value of an investment of $\textcolor{#c34632}{\$10,000}$ for $\textcolor{#c34632}{10 \ \text{years}}$ years at an interest rate of $\textcolor{#c34632}{2\%}$ **compounded quarterly**, we will use this formula:

$\begin{aligned} A = P \left ( 1 + \dfrac{APR}{n} \right )^{nY} \end{aligned}$

where $A$ is the accumulated balance after $Y$ years, $P$ is the starting principal, $APR$ is the annual percentage rate in decimal form, $n$ is the compounding periods per year, and $Y$ is the time in years.

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