Asked by
Katelyn Voris
on Dec 02, 2024
Verified
If you deposit $250 each quarter in a bank account that pays interest at 16% compounded quarterly, how much will you have at the end of five years?
A) $3397.58
B) $1354.08
C) $7444.53
D) $6074.25
Compounded Quarterly
The process of calculating interest and adding it to the principal sum of a deposit or loan on a quarterly basis, leading to interest on interest.
Quarterly Deposits
Deposits made into an account or investment vehicle at regular intervals every three months within a year.
Bank Account
A financial account maintained by a bank or other financial institution in which the financial transactions between the customer and the bank are recorded.
- Compute the future worth of a sequence of payments or investments with different interest rates and durations.
- Examine how the frequency of compounding periods, such as monthly, quarterly, and annually, affects interest accumulation or disbursement.
Verified Answer
LI
Learning Objectives
- Compute the future worth of a sequence of payments or investments with different interest rates and durations.
- Examine how the frequency of compounding periods, such as monthly, quarterly, and annually, affects interest accumulation or disbursement.