Compound interest problem

[imbadatmath]

2000 dollars is invested at a rate of 12 percent per year. What is the principle after 5 years if interest is compund quarterly?

[redarmy]

Suppose the interest rate quarterly is q, The principal is P, then the interest earned (I) after n years is:

I = P(1 + q)^(4n)

In this case, the interest rate quarterly is (12%)/4 = 3%

So the interest earned after n years is
I = 2,000(1 + 3%)^20 = 3,612