3
advanced-math$2,000 is invested at 8% interest compounded quarterly. What is the value after 2 years?
Formula:
A
$2,343.32
B
$2,320.00
C
$2,160.00
D
$2,400.00
Correct Answer: A
Choice A is the correct answer. Use the compound interest formula for quarterly compounding.
- Values: , , (quarterly), .
- Calculate: .
- Compute: , so .
💡 Strategic Tip: Quarterly means , so divide rate by 4 and multiply time by 4.
Choice B is incorrect because this assumes annual compounding, not quarterly. Choice C is incorrect because this uses simple interest. Choice D is incorrect because this calculation is incorrect.