The correct answer is: $15,219
We need to calculate the effective rate of interest.
8% per annum (nominal) is 2% per quarter.
The effective annual rate of interest is [1.024 - 1] = 0.08243 = 8.243%.
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Now we can use |
S |
= |
X(1 + r)n |
|
|
S |
= |
12,000 (1.08243)3 |
|
|
S |
= |
$15,218.81 |
The principal will have grown to approximately $15,219.
