so im finishing up a take home test thats due at 1pm today for a consumer math class and im getting totally ****ed up on a problem. Someone pwease help me...
Problem) if a $20,000 investment has an annual rate of return of 10%, and is compounded quarterly, what is the value of the investment in 25 years.
when working it out i was using the equation:
A=P(1+r/n)^(n)(t)
A = ammount
P = principal invested
r = annual rate of interest
n = # of compounding periods per year
t = time in years (of investment)
^ = to the power of (obviously)
the answer i ended up with was $236,280.00 what im getting stuck on is i am pretty sure that [annual rate of return] is not the same as [r], or annual rate of interest.
any help would be much appreciated!