1. Charlotte invested $76,000 in an account paying an interest rate of 2.1% compounded monthly. Assuming no deposits or withdrawals are made, how much money, would be in the account after 16 years?

2. Bentley invested $81,000 in an account paying an interest rate of 2.2% compounded quarterly. Assuming no deposits or withdrawals are made, how much money, to the nearest dollar, would be in the account after 19 years?

RainbowPanda Jan 23, 2019

#1**0 **

FV = PV (1+ i)^n i = 2.1 % per year divided by 12 months = .00175 monthly n = 12 months * 16 yrs = 192 periods

= 76000 (1.00175)^192 = $ 106318.54

Same equation PV = 81000 i = periodic interest = 2.2% / 4 (quarterly ) = .0055 n = periods = 19 yrs x 4/yr = 76 periods

81000(1.0055)^76 = $ 122892 (rounded to nearest dollar)

ElectricPavlov Jan 23, 2019