You just deposited $2,500 in a bank account that pays a 4.0% nominal interest rate, compounded quarterly. If you also add another $5,000 to the account one year (4 quarters) from now and another $7,500 to the account two years (8 quarters) from now, how much will be in the account three years (12 quarters) from now

The value of the investment would be $16,035.87 in 12 quarters from now

Explanation:

The value of $2,500 after four quarters can be determined with the below formula:

FV=PV * (1+r/t) ^N*t

FV is the future value of the investment, the unknown

PV, the present value of the investment is the amount invested.

r is the rate of return of 4%

t is the number of times interest is paid annually, 4 times in this case

After the first four quarters, the worth of the investment is shown thus:

FV=$2500 * (1+4%/4) ^1*4

FV=$2500 * (1+1%) ^4

FV=$2,601.51

After that $5000 was added to $2,601.51 making $7,601.51 which was reinvested to yield the below:

FV=$7,601.51 * (1 + in 4%/4) ^1*4

FV=$7,601.51 * (1+1%) ^4

FV=$7910.16

Then $7,500 was added to $7,910.16 which turns $15,410.16

FV=$15,410.16 * (1+4%/4) ^1*4

FV=$15,410.16 * (1+1%) ^4

FV=$16,035.87