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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?

 Jan 23, 2019
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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)

 Jan 23, 2019

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