Question

QUESTION 10

1. You are going to deposit $2500 in an account that pays 0.51 percent interest compounded quarterly. How much will you have in 5 years?

   		$2781.86
   		$2770.82
   		$2753.70
   		$2765.62
   		$2767.74

Answer 1

Annual rate = Quarterly rate * a = 0.51% * 4	2.04%
Future value = Present value * ( 1+r/n)^(n*t)
Here, r = 2.04%
n = Number of compounding in a year = 4
t = Number of years = 5
Future value = 2500 * (1+2.04%/4)^(4*5)	2767.74	(5th option)