Answer:
$ 6, 529.40
Explanation:
The value of the investment will be the future value of $6000 invested at 4.25 percent compounded quarterly for two years.
The formula for calculating the future is as below.
FV = PV × (1+r)n
where FV = Future Value
PV = Present Value : $6000
r = annual interest rate: 4.25 % divide by four
n = number of periods: 8 (2 x 4)
Since interest is paid quarterly or four times per year, the applicable interest rate will be 4.25 /4 = 1.0625%
There will be 8 periods( 4 quarters per year x 2)
Fv = 6000 x (1 + 1.0625/100)8
Fv =6000 x (1+ 0.010625)8
Fv =6000 x 1.08822900
Fv= 6529.3740
FV= $ 6, 529.40
