The formula to calculate the present amount including compound interest is A = P(1 + r/n)nt , where P is the principal amount, r is the annual rate expressed as a decimal , t is the number of years, and n is number of times per year that interest is compounded.
NOTE : It is assumed that the interest rate quoted is an ANNUAL rate and not a QUARTERLY rate.
In the question, P = 1400, r = 0.16, t = 6, and n = 4
Then the Maturity Value (A) = 1400(1 + 0.16/4)(4x6) = 1400(1.04)24 = $3588.63
NOTE : It is assumed that the interest rate quoted is an ANNUAL rate and not a QUARTERLY rate.
In the question, P = 1400, r = 0.16, t = 6, and n = 4
Then the Maturity Value (A) = 1400(1 + 0.16/4)(4x6) = 1400(1.04)24 = $3588.63
