An investor deposits $10,000 into an account that earns 5% annual interest, compounded quarterly. How much will the account be worth after 3 years?

Tue, 05 May 2026 09:11:30 +0000

**How Much Will an Investment Grow? The Surprising Return on $10,000 at 5% Compounded Quarterly Over 3 Years** Ever wondered exactly how much a $10,000 investment grows when earning 5% annual interest, compounded every three months? In today’s economy, many investors are exploring steady, reliable returns on savings and retirement accounts. This scenario—starting with a $10,000 deposit at 5% annual interest, compounded quarterly for three years—offers clear insights into how time and compounding work together. Understanding these mechanics helps in planning both short-term savings goals and long-term wealth growth. Why is this topic gaining traction among US investors? With rising interest rates creating strong momentum for income-focused investments, understanding compound interest isn’t just academic—it’s essential. Compounding turns modest sums into meaningful sums over time, especially when rates remain favorable. As financial awareness grows, users increasingly seek reliable projections to guide their decisions without overwhelming complexity. To break it down: an investment of $10,000 earning 5% annual interest, compounded quarterly, generates interest four times per year. Each quarter, the interest earned is calculated on the current balance, including previous earnings. This effect, known as compound interest, reflects real-world growth seen in savings accounts, commercial CDs, and retirement plans. After three years—12 compounding periods—the math shows how even small starting amounts can multiply significantly thanks to reinvested earnings.