Question

What sum of money will grow to ​$3628.49 in three years at 7.3​% compounded quarterly ?

The sum of money is?

​(Round to the nearest cent as needed. Round all intermediate values to six decimal places as​ needed.)

Answer 1

Here, the sum of money that will grow to $3628.49 in three years at 7.3% compounded quarterly is calculated by using the future value formula

Future Value = $3,628.49

Quarterly Interest Rate (r) = 1.825% per Quarter [7.30% / 4 Quarters]

Number of Periods (n) = 12 Quarters [3 Years x 4 Quarters]

Present Value = ?

Future Value = Present Value x (1 + r)ⁿ

$3,628.49 = Present Value x (1 + 0.01825)¹²

$3,628.49 = Present Value x 1.242376

Present Value = $3,628.49 / 1.242376

Present Value = $2,920.61

“Therefore, the sum of money would be $2,920.61”