You deposit $1000 in an account that pays 7% interest compounded semiannually. After 4 years, the interest rate is increased to 7.36% compounded quarterly. What will be the value of the account after a total of 8 years?

Step-by-step explanation:

GIVEN: You deposit in an account that pays interest compounded semiannually. After years, the interest rate is increased to compounded quarterly.

TO FIND: What will be the value of the account after a total of  years.

SOLUTION:

Total initial amount deposited in account

rate of interest for first

As interest compounds semiannually, it compounds twice a year

Amount generated by compound interest  

Here initial Principal amount

Here total duration

total number of times compounding done

putting values

after the rate is changed and the amount generated after first will be the new principal amount

new Principal amount

total duration

compounding done in a year

new rate of interest

putting values in above mentioned formula

Hence after years there will be in account.