Question

(Related to Checkpoint 5.3) (Compound interest with non-annual periods) Calculate the amount of money that will be in each of the following accounts at the end of the given deposit period: 1 Amount Annual Compounding Compounding Account Holder Deposited Interest Rate Periods Per Year (M) Periods (Years) Theodore Logan III $ 1,000 16% 2 10 Vernell Coles 96,000 12 12 3 Tina Elliot 9,000 8 6 Wayne Robinson 121,000 10 3 4 Eunice Chung 30,000 12 6 Kelly Cravens 17,000 10 4 5 a. The amount of money in Theodore Logan Il's account at the end of 10 years will be $. (Round to the nearest cent.) 5 The amount of money in Vernell Coles account at the end of 3 years will be $ The amount of money in Tina Elliotts account at the end of 6 years will be $_ The amount of money in Wayne Robinson's account at the end of 4 years will be $ The amount of money in Eunice Chung's account at the end of 5 years will be $ The amount of money in Kelly Cravens account at the end of 5 years will be $

Answer 1

Solution

Future value of money=Amount deposited*(1+r)^n

Where r-Intrest per period

n=number of periods

Here the future value is calculated in below table

А B D H C Annual interest rate in % 16 in % Compounding periods per year 2 12 1 Name 2 Theodore Logan 3 Vermelli coles 4 Tina elliots 5 Wayne Robinson 6 Eunice chung 7 Kelly Craverns 12 E F G Intrest rate Compounding Toatl number of per period-r periods years periods(n) 10 20 8 3 36 1 6 6 8 4 12 3.333333333 5 30 2 Amount deposited 1000 96000 9000 121000 30000 17000 8 1 Future value 4660.96 137353.80 14281.87 179337.31 54340.85 27856.48 10 3 12 6 10 4 5 20 2.5

Formula used

А B C D E F G H 1 Amount deposited 1000 2 3 96000 Annual interest | Compounding Compounding rate in % periods per year periods years Toatl number of periods(n) Intrest rate per period-r in % 16 2 10 =E2*D2 =C2/D2 12 12 3 =E3*D3 =C3/D3 8 1 6 1=E4*D4 =C4/04 10 3 4 =E5*D5 =C5/05 12 6 5 =E6*D6 =C6/D6 10 14 5 =E7*D7 =C7/07 Name Theodore Logan Vermelli coles Tina elliots Wayne Robinson Eunice chung Kelly Craverns 4 9000 Future value =B2*(1+G2%)^F2 =B3*(1+G3%)^F3 =B4*(1+G4%)^F4 =B5*(1+G5%)^F5 =B6*(1+G6%)^F6 =B7*(1+G7%)^F7 5 121000 6 30000 7 17000

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