How much is 2000 worth after 40 Quarterlys using an annual interest rate of 3% compounded Quarterly?

<-- Start Balance
<-- # of periods
<-- Interest rate
              

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How much is 2000 worth after
40 quarters
using an annual interest rate of 3%
compounded quarterly?

Calculate effective interest rate

There are 4 quarters in a year
Convert interest rate to quarterly

Quarterly Interest  =	Annual Interest Rate
	Compounding Periods

Quarterly Interest  =	0.03
	4

Quarterly Interest = 0.0075

Calculate Accumulated Balance

A = B(1 + i)ⁿ
where A = accumulated balance
B = opening balance
i = Quarterly interest rate
and n = number of periods

Plugging in our values

A = 2000(1 + 0.0075)⁴⁰
A = 2000(1.0075)⁴⁰
A = 2000(1.3483486123364)
A = 2,696.70

How much interest was earned?

Interest Earned = Accum. Value - Start Balance

Plug in our values

Interest Earned = 2,696.70 - 2,000.00
Interest Earned = 696.70