Use the compound interest formula to find the compound amount on a $12,000 investment at 5% compounded quarterly for 4 years.
$14,400

$14,638.67

$2,400

$2,638.67

B, $14,638.67

Step-by-step explanation:

the compound interest formula is A = P(1 + r/n)^nt

A = the result

P = principal amount

r = the rate (in decimals)

n = number of times its compounded (ex: yearly, semi-annually)

t = time

so we are given the value for P (12,000), r (5% which = 0.05), n (keyword is quarterly, which is the value 4), and t (4 years), we plug this into the formula:

A = 12,000(1 + 0.05/4)^4×4

you can solve this easier by plugging the equation into the calculator, or doing it step by step

A = 12,000(1 + 0.05/4)^4×4 < exponent turns into 16

A = 12000(1 + 0.05/4)^16 < (1 + 0.05/4) turns into 1.0125

A = 12000(1.0125)^16  < raise 1.0125 to the 16th power

A = 12000(1.21988954) < multiply 1.21988954 by 12,000

A ≈ 14,638.67

so $12,000 invested at 5% compounded quarterly for 4 years is approximately $14,638.67, which is answer choice B