Question

Suppose that $6,000 is placed in a bank account at the end of each quarter over the next 11 years. What is the future worth at the end of 11 years when the interest rate is 15% compounded at the given intervals? (a) Quarterly (b) Monthly (c) Continuously (a) The future worth will be $ 648345 . (Round to the nearest dollar.) (b) The future worth will be $ 656,400. (Round to the nearest dollar.) (c) The future worth will be $ (Round to the nearest dollar.)

Answer 1

Solution As qiven, Principa amount clepoited fn' ank Auount 6000 onquunN IS ORO.IS Rattnterest Fulie woth(A) (a) fer artery Covnpound Where Aue Worth P Prinuipal iRati intereot mz Numbe compoundhg tnayar n Numbe ap 4 x O.15 4 44 D.0375) (1+DS 1+00 A $6000 A 6000 44 A $6000 (10375) 6000 5.05 2= * 30,313.20 A = 30,313 fuure wonth niu be $ 30,313 49

(b) er monthly Compoundina P(1+ A A 6000 ( 1+0,15112x! 2 132 A $6000 1 + 0.0125) (32 A 6900 (.D125) $6000 x 5.1S40 $3092Y A Ampunt (A)$30,924 fNture worth wil be 30,924 (c) rContinuouy compoundt A P e 2.7/8 Where e O,15 X1 A - 6000 x(2718)°",. A 6000 x(2.718)P63 5. 206 31,236.60 A 6000 A 231,237 Amount31,2 37 worh wile be 31,237