How much is 9500 worth after 44 quarters
using an annual interest rate of 2.1%
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 = | 0.021 |
| 4 |
Quarterly Interest = 0.00525
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 = 9500(1 + 0.00525)44
A = 9500(1.00525)44
A = 9500(1.2590981855945)
A = 11,961.43
How much interest was earned?
Interest Earned = Accum. Value - Start Balance
Plug in our values
Interest Earned = 11,961.43 - 0.00
Interest Earned = 11,961.43
11961.43
Final Answer
A = 11,961.43
