2. Determine the amount of an investment if $500 is invested at an interest rate of 6.75%
compounded quarterly for 10 years.

$976.50

Step-by-step explanation:

Lets use the compound interest formula to solve:

P = initial balance

r = interest rate (decimal)

n = number of times compounded annually

t = time

Lets change 6.75% into a decimal first:

6.75% -> -> 0.0675

Since the interest is compounded quarterly, we will use 4 for n. Lets plug in the values now:

The investment is worth $976.50 after 10 years.

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