I might make one more question. Will rate based on how much i trust your answer.

rarinstraw1195
Dec 5, 2016

#1**+10 **

As the problem gives you a detailed equation where values should be inputted into the equation. Why ask us when you seem more than capable of doing this equation. However, if you do insist on help...I will gladly help.

Guest Dec 5, 2016

#2**+10 **

(a - ) A=P[1 +r/n]^(nt)

A =5,000 x [1 + 0.05/4]^(5*4)

A =5,000 x [1.0125]^20

A =5,000 x 1.282037

A = $6,410.19

b- Use the same formula as above:

10,000 =5,000 x 1.0125^n, where n = number of quarters. Divide both sides by 5,000

2 = 1.0125^n take the log of both sides

n = Log(2) / Log(1.0125)

n =~56 quarters

56/4 =~14 years

c- Use the same formula as above:

A =5,000 x [1 + 0.05/12]^(5*12), calculate the as as in "a" above:

A =$6,416.79

$6,416.79 - $6,410.19 =$6.60 the difference between comp. monthly and comp. quarterly.

Guest Dec 5, 2016