document.write( "Question 622147: how much money would be in an account after 5 years if an original investment of $6500 was compounded quarterly at 4.5%?. compare this amount to the same investment that was compounded daily. round to the nearest cent. \n" ); document.write( "

Algebra.Com's Answer #391152 by lwsshak3(11628) $\"\"$ $\"About$

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how much money would be in an account after 5 years if an original investment of $6500 was compounded quarterly at 4.5%?. compare this amount to the same investment that was compounded daily. round to the nearest cent.
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\n" ); document.write( "Compound Interest formula:
\n" ); document.write( "A=P(1+i)^n, P=initial investment, i=interest rate per period, A=amount after n periods
\n" ); document.write( "For given problem:
\n" ); document.write( "compounding quarterly
\n" ); document.write( "P=6500
\n" ); document.write( "i=.045/4 (annual interest/number of compounding periods per year)
\n" ); document.write( "n=5*4=20 periods
\n" ); document.write( "A=6500(1+.045/4)^20
\n" ); document.write( "using calculator
\n" ); document.write( "A=8129.88
\n" ); document.write( "..
\n" ); document.write( "compounding daily
\n" ); document.write( "P=6500
\n" ); document.write( "i=.045/365 (annual interest/number of compounding periods per year)
\n" ); document.write( "n=5*365=1825 periods
\n" ); document.write( "A=6500(1+.045/365)^1825
\n" ); document.write( "using calculator
\n" ); document.write( "A=8139.98
\n" ); document.write( "..
\n" ); document.write( "compounding daily gives about $10 more over a 5-year period \n" ); document.write( "

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