Question

Use the compound interest formulas A=P(1+r/n)^nt and A=Pe^rt to solve the problem given. Round answers to the nearest cent.

Find the accumulated value of an investment of $15,000 for 5 years at an interest rate of 7 %if the money is a. compounded semiannually; b. compounded quarterly; c. compounded monthly; d. compounded continuously.

a. What is the accumulated value if the money is compounded semiannually?

b.What is the accumulated value if the money is compounded quarterly?

c. What is the accumulated value if the money is compounded monthly?

d. What is the accumulated value if the money is compounded continuously?

Answer 1

Solution Given Formulal int A=P(ltr (1+ and A=pert le annual rate of interest n = number of times interest is compounded in a yeas number of year I Compounded Semiannualy (n=2) (1+0,07 t z P=15000 Hz 74. 20.07 5x2 Az 15ooo tz 5 years $ 21158.98140 -) $ 21158.90 Answes Compounded II (124) Quarterly A 15000 It 0107 5x4 ५ AZ 21221.67293 17) $ 121221067) Answer TIL) n = 12 12x5 A 15000 1 +0.07 12 = 2126 4:37889 $ 121264•37 Answer rius Compounded continuently Az pert 2 15000 e(0.07)*5 2$21286.012 Ans wes