- Thread starter
- #1

- Thread starter kaye
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- Thread starter
- #1

- Mar 1, 2012

- 1,013

$A$ = account balance after $t$ years

$A_0$ = initial account balance

$r$ = annual interest rate as a decimal

$n$ = number of compounding periods per year

If the interest rate is 7.75% p.a. compounded quarterly, then the quarterly rate is 1.9375%.

So every quarter, you increase by 1.9375%, thus you end up with 101.9375%.

Thus the multiplier is 1.019375

If you're investing for 3 years, then that's 12 quarters.

Thus $\displaystyle A = 50\,000 \times \left(1.019\,375 \right)^{12} $.