SOLUTION: Please help me understand this
The formula when interest is compounded n time per year is A=p(1+r/n)nt
Where A is the accrued amount after t years, P is the starting principa
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Question 1093899: Please help me understand this
The formula when interest is compounded n time per year is A=p(1+r/n)nt
Where A is the accrued amount after t years, P is the starting principal, and r is the interest rate, expressed as a decimal, that is compounded n times a year. If you invest $1000 at an interest rate of 7%, and leave it there for 30 years, determine your ending balance if the interest is compounded.
1. Once a year 2. Twice a year
Found 2 solutions by stanbon, josmiceli:
Answer by stanbon(75887) (Show Source): You can put this solution on YOUR website!
The formula when interest is compounded n time per year is A=p(1+r/n)nt
Where A is the accrued amount after t years, P is the starting principal, and r is the interest rate, expressed as a decimal, that is compounded n times a year. If you invest $1000 at an interest rate of 7%, and leave it there for 30 years, determine your ending balance if the interest is compounded.
1. Once a year
A(t) = P(1+(r/n))^(nt)
Let t = 1
A(30) = 1000(1+(0.07/1))^(1*30)
A(1) = 1000(1.07)^30
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2. Twice a year
A(30) = 1000(1+(0.07/2))^(2*30)
A(30) = 1000(1.035)^60
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Cheers,
Stan H.
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Answer by josmiceli(19441) (Show Source): You can put this solution on YOUR website!
is the amount you end up with after years
is the amount you begin investing with
is the interest rate
is the number of times you compound per year
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Note that unless you know what and are
for instance, if , you could have or
.
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(1)
$7,612.30 ending balance
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(2)
$7,878.10 ending balance
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get a 2nd opinion, too, if needed
on the problems
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