How much is 500 worth after
40 quarters
using an annual interest rate of 4%
compounded quarterly?
Calculate effective interest rate
There are 4 quarters in a yearConvert interest rate to quarterly
| Quarterly Interest = | Annual Interest Rate |
| Compounding Periods |
| Quarterly Interest = | 0.04 |
| 4 |
Quarterly Interest = 0.01
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 = 500(1 + 0.01)40A = 500(1.01)40
A = 500(1.4888637335882)
A = 744.43
How much interest was earned?
Interest Earned = Accum. Value - Start Balance
Plug in our values
Interest Earned = 744.43 - 500.00Interest Earned = 244.43
A = 744.43
Interest Earned = 244.43
Interest Earned = 244.43
Keep Practicing
What is the Answer?
A = 744.43
Interest Earned = 244.43
Interest Earned = 244.43
How does the Compound Interest Accumulated Balance Calculator work?
Free Compound Interest Accumulated Balance Calculator - Given an interest rate per annum compounded annually (i), semi-annually, quarterly, monthly, semi-monthly, weekly, and daily, this calculates the accumulated balance after (n) periods
This calculator has 3 inputs.
This calculator has 3 inputs.
What 1 formula is used for the Compound Interest Accumulated Balance Calculator?
What 5 concepts are covered in the Compound Interest Accumulated Balance Calculator?
- compound interest
- the interest you earn on principal and interest
A = (1 + r/n)nt - compound interest accumulated balance
- interest rate
- the proportion of a loan that is charged as interest to the borrower or proportion of principal credit given to a depositor
- principal
- The amount borrowed on a loan, before interest is charged
- yield
- How much an investment returns in terms of interest rate
Example calculations for the Compound Interest Accumulated Balance Calculator
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