A bank account earns 4% annual interest compounded quarterly. If $2,500 is deposited, how much will be in the account after 2 years?

Sat, 02 May 2026 18:07:42 +0000

**A Bank Account Earns 4% Annual Interest Compounded Quarterly. If $2,500 Is Deposited, How Much Will Be in the Account After 2 Years?** Curious about how even modest savings grow with interest? Many Americans are turning to bank accounts that earn interest—especially after rising prices and shifting financial priorities have kept savings behavior under the spotlight. One widely discussed option is a bank account offering 4% annual interest, compounded quarterly. With $2,500 deposited, users wonder: What’s the real return after two years? This interest formula isn’t just academic—it’s a practical tool for growing modest savings over time. Despite economic uncertainty, the steady, predictable nature of compound interest appeals to steady savers and young investors alike. The 4% annual rate compounded quarterly means interest builds on both the original deposit and previously earned gains, accelerating growth gradually. **How Does Compounded Interest Work in This Account?**
Under this compounding structure, interest is calculated four times a year, based on the current account balance. The formula used is:
FV = P × (1 + r/n)^(nt)
Where:
- P = $2,500 (initial deposit)
- r = 0.04 (4% annual rate)
- n = 4 (quarterly compounding)
- t = 2 years