1. Amy has deposited $661 in a savings account that earns interest at a rate of 3.1% compounded monthly. What will the account balance be in 15 years?
2. Ricardo has an account balance of $419.21 in a savings account that earns interest at a rate of 5.5% compounded quarterly. If Ricardo opened the account seven years ago , what was the principal deposit?
+502 1. Amy has deposited $661 in a savings account that earns interest at a rate of 3.1% compounded monthly. What will the account balance be in 15 years?
Compound interest= p*(1+r)^t
661*(1+3.1/100)^15
I=1044.916143
Rauhan: Look at here and see how it is done correctly:
1) -
FV = PV x [1 + R]^N, FV=Future value, PV=Present value, R=Interest rate, N=Number of periods.
FV =661 x [1 + 0.031/12]^(15*12]
FV =661 x [ 1.0025833]^180
FV =661 x 1.59106
FV =$1,051.69 The balance in Amy's account in 15 years.
2) -
PV = FV / [1 + R]^N
PV = 419.21 / [ 1 + 0.055/4]^(7*4)
PV = 419.21 / [ 1.01375]^28
PV = 419.21 / 1.465765
PV =$286.00 The amount Ricardo deposited 7 years ago.
