SOLUTION: Gabriel invested $53,300 in a mutual fund at 3.4% compounded quarterly. After 4 years, the interest rate was changed to 6.4% compounded monthly. a) How much was the value of the

Algebra.Com
Question 1192860: Gabriel invested $53,300 in a mutual fund at 3.4% compounded quarterly. After 4 years, the interest rate was changed to 6.4% compounded monthly.
a) How much was the value of the fund 8 years after the rate change? $

b) How much was the total compound interest earned during the whole term?
Found 2 solutions by greenestamps, ikleyn:
Answer by greenestamps(13200)   (Show Source): You can put this solution on YOUR website!


The calculations are straightforward; I'll let you do them (with a calculator!)....

Starting value:

After 4 years at 3.4% compounded quarterly:

After the additional 8 years at 6.4% compounded monthly:

Then the interest earned is of course that final value, minus the original $53,300.
Answer by ikleyn(52781)   (Show Source): You can put this solution on YOUR website!
.


            The solution by other tutor is not quite accurate.
            I came to bring a correct solution. 


Starting value: 


After 4 years at 3.4% compounded quarterly: 


After the additional 8 years at 6.4% compounded monthly the final value is 

     = 101697.33  dollars.    ANSWER to question (a)


The interest earned is the final value minus the original $53,300, i.e. 

    101697.33 - 53000 = 48697.33.                                  ANSWER to question (b)

Solved.



RELATED QUESTIONS

Brooke invested $16,700 in a mutual fund at 2.8% compounded monthly. After 2 years, the... (answered by Theo,ikleyn)
Hannah invested $35,000 in a mutual fund that earns 6% interest per annum compounded... (answered by jorel1380)
John invested $3000 that earns interest at 4% p.a. compounded monthly. Two years later,... (answered by Theo)
Wealey invested $6,500 in a mutual fund at a yearly rate of 3 3/4%. If he earned %975 in... (answered by orca)
Compound Interest: Suppose $4,000 is invested in each account below. In each case find... (answered by solver91311)
please help me solve this : Moira inherited $15,000 and invested part of it in a money... (answered by FrankM)
When Sophie was born her parents invested a sum of $20,000 in her college fund. They... (answered by ikleyn)
A woman invests $3,000 in a mutual fund for which interest is compounded annually at a... (answered by Solver92311)
so if $200 is invested at interest rate of 4% compounded quarterly then the amount after... (answered by Boreal)