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Business Mathematics and Basic Statistics · Ch 2 — Compound Interest

Compound Interest Compounded Quarterly

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Compound Interest Compounded Quarterly

When interest is compounded quarterly (four times a year), the annual rate is divided by 4 and the number of periods is multiplied by 4, since there are 4 quarters in a year. The amount is

A=P(1+r400)4tA = P\left(1 + \frac{r}{400}\right)^{4t} …