If a person has 10,000.00 in an IRA and it earns interest compound quarterly, how much interest will they have in one year, and how does a person figure compound interest quarterly?
2006-12-11 06:09:24 · 3 answers · asked by marge8710 2 in Business & Finance ➔ Investing
webmath.com is a great free site to figure interest
2006-12-11 06:22:10 · answer #1 · answered by mark j 3 · 0⤊ 0⤋
You need a time value of money calculator. An important variable that you are missing is the interest the IRA will grow at. In the real world the interest rate will be different every year. But let's use 10% for this example.
After 1 year: $11,038 ($1,038.1289 is interest)
After 5 years: $16,386
After 10 years: $26,850
After 20 years: $72,095
After 50 years: $1,395,638
The more time the money can grow, the more it will grow!
2006-12-11 06:17:28 · answer #2 · answered by MR MONEY 3 · 0⤊ 0⤋
The formula for how much you will have after N quarters is:
A*(1+R/4)^N
Here --
A is the amount you invested
R is the stated nominal rate
2006-12-11 06:21:34 · answer #3 · answered by Ranto 7 · 0⤊ 0⤋