Answer:
To find the future value of $10,000 invested at 12% APR compounded quarterly for 12 years, you can use the formula for compound interest. Here's how you can calculate it step by step:
1. First, determine the quarterly interest rate. Since the annual percentage rate (APR) is 12%, the quarterly interest rate would be 12% divided by 4 (since there are 4 quarters in a year): 12%/4 = 3% or 0.03 as a decimal.
2. Next, calculate the total number of compounding periods over 12 years. Since compounding is done quarterly, there are 4 quarters in a year, so for 12 years, there would be 12 * 4 = 48 compounding periods.
3. Now, plug the values into the compound interest formula:
Future Value = Principal Amount * (1 + Quarterly Interest Rate)^Number of Compounding Periods
Future Value = $10,000 * (1 + 0.03)^48
4. Calculate the future value:
Future Value = $10,000 * (1.03)^48
Future Value = $10,000 * 2.915
5. Finally, compute the future value:
Future Value = $29,150
Therefore, the future value of $10,000 invested at 12% APR compounded quarterly for 12 years would be $29,150.
Step-by-step explanation:
