document.write( "<A HREF=/cgi-bin/jump-to-question.mpl?question=1025434>Question 1025434</A>: <I><SPAN STYLE=\"word-break: break-all;\"> Peter deposits k450 00.00 with BSP which offers 4 1/2% per annum interest.Calculate the interest earned after 4 years if it is compounded every three months </SPAN>\n" );
document.write( "</I><HR><TABLE width=100%><TR><TD><B><A HREF=http://www.algebra.com/>Algebra.Com's</A> Answer #640697 by </B><A HREF=/tutors/aboutme.mpl?userid=Theo><B>Theo(13342)</B></A><img src=\"/images/stars/stars-13.gif\" alt=\"\" >&nbsp;<A HREF=/tutors/aboutme.mpl?userid=Theo><IMG SRC=http://www.algebra.com/images/aboutme-small.gif BORDER=0 alt=\"About Me\" VALIGN=MIDDLE></A>&nbsp;<IMG SRC=http://www.algebra.com/cgi-bin/show-face.mpl?user=Theo><BR>You can <A HREF=\"/cgi-bin/embed-solution.mpl?show=1&solution=640697\">put this solution on YOUR website!</A><BR><SPAN STYLE=\"word-break: break-all;\"> with compound interest, the formula is:\r<BR>\n" );
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document.write( "f = p * (1 + r) ^ n\r<BR>\n" );
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document.write( "f is the future value<BR>\n" );
document.write( "p is the present value<BR>\n" );
document.write( "r is the interest rate per time period.<BR>\n" );
document.write( "n is the number of time periods.\r<BR>\n" );
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document.write( "the interest rate if 4.5% per year.\r<BR>\n" );
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document.write( "a year is 12 months.\r<BR>\n" );
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document.write( "3 months / 12 months = 1/4 of a year.\r<BR>\n" );
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document.write( "that's equal to a quarter of a year.\r<BR>\n" );
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document.write( "the interest is compounded 4 times a year.\r<BR>\n" );
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document.write( "the time period is 1 quarter of a year.\r<BR>\n" );
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document.write( "the interest rate per time period is 4.5 / 4 = 1.125% per time period.\r<BR>\n" );
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document.write( "the number of time periods is 4 * 4 = 16 time periods.\r<BR>\n" );
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document.write( "r = percent / 100, therefore r = 1.125% / 100 = .01125.\r<BR>\n" );
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document.write( "the formula of f = p * (1+r) ^ n becomes:\r<BR>\n" );
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document.write( "f = p * 1.01125) ^ 16\r<BR>\n" );
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document.write( "i'm not exactly sure what your deposit is.\r<BR>\n" );
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document.write( "k450 00.00 doesn't make sense to me.\r<BR>\n" );
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document.write( "why the k?\r<BR>\n" );
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document.write( "i'll assume it's 450 for demonstration purposes.\r<BR>\n" );
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document.write( "you can then translate the answer to whatever value you meant, if it's not 450.\r<BR>\n" );
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document.write( "for example, if it was 450,000 rather than 450, then just multiply the answer by 1000, because 450,000 = 450 * 1000.\r<BR>\n" );
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document.write( "so, assuming the deposit is 450, then p = 450 and the formula becomes:\r<BR>\n" );
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document.write( "f = 450 * (1.01125) ^ 16.\r<BR>\n" );
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document.write( "solve for f to get f = 538.2066601.\r<BR>\n" );
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document.write( "that's the future value of the investment, which includes principal plus interest.\r<BR>\n" );
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document.write( "the interest earned is f - p = 538.2066601 - 450 = 88.2066601.\r<BR>\n" );
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document.write( " </SPAN>\n" );
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