document.write( "Question 1194138: Emmerson invests N$100,000.00 on a monthly basis, at the end of each month at an interest rate of 8.5% compounded quarterly.
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document.write( "a) How much will he have after 3.5 years
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document.write( "b) How much interest does he earn on a monthly basis? (Hint: Calculate the monthly average) \n" );
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Algebra.Com's Answer #826294 by ikleyn(52790)![]() ![]() You can put this solution on YOUR website! . \n" ); document.write( "Emmerson invests N$100,000.00 on a monthly basis, at the end of each month at an interest rate of 8.5% compounded quarterly. \n" ); document.write( "a) How much will he have after 3.5 years \n" ); document.write( "b) How much interest does he earn on a monthly basis? (Hint: Calculate the monthly average) \n" ); document.write( "~~~~~~~~~~~~~~~~~~~~~~\r \n" ); document.write( " \n" ); document.write( " \n" ); document.write( "\n" ); document.write( " The solution by @Theo is incorrect, since in calculations he mistakenly considers N$100,000.00 as quarterly deposits,\r \n" ); document.write( "\n" ); document.write( " while they are the monthly contributions.\r \n" ); document.write( " \n" ); document.write( "\n" ); document.write( " In my post below, I am placing a correct solution for question (a), ONLY.\r \n" ); document.write( " \n" ); document.write( "\n" ); document.write( " Question (b) is posed in unclear way, so I will not answer it, at all.\r \n" ); document.write( " \n" ); document.write( " \n" ); document.write( "\n" ); document.write( " \r\n" ); document.write( "As I understand, this account works as follows:\r\n" ); document.write( "\r\n" ); document.write( "\r\n" ); document.write( " Emmerson invests 100,000 every month; but the bank makes compounding only once in 3 months.\r\n" ); document.write( " So, every month investments of 100,000 wait to the end of the quarter, and only after that \r\n" ); document.write( " the compounding is made and 300000 is added.\r\n" ); document.write( "\r\n" ); document.write( "\r\n" ); document.write( " So, it works as an usual Ordinary Annuity quarterly compound account with 300,000 quarterly deposits.\r\n" ); document.write( "\r\n" ); document.write( "\r\n" ); document.write( "\r\n" ); document.write( "The standard general formula for Ordinary Annuity is \r\n" ); document.write( "\r\n" ); document.write( "\r\n" ); document.write( " FV =\r \n" ); document.write( "\n" ); document.write( "-----------------\r \n" ); document.write( " \n" ); document.write( "\n" ); document.write( "On Ordinary Annuity saving plans, see the lessons\r \n" ); document.write( "\n" ); document.write( " - Ordinary Annuity saving plans and geometric progressions\r \n" ); document.write( "\n" ); document.write( " - Solved problems on Ordinary Annuity saving plans\r \n" ); document.write( "\n" ); document.write( "in this site.\r \n" ); document.write( " \n" ); document.write( "\n" ); document.write( "The lessons contain EVERYTHING you need to know about this subject, in clear and compact form.\r \n" ); document.write( " \n" ); document.write( "\n" ); document.write( "When you learn from these lessons, you will be able to do similar calculations in semi-automatic mode.\r \n" ); document.write( " \n" ); document.write( " \n" ); document.write( "\n" ); document.write( "----------------\r \n" ); document.write( " \n" ); document.write( " \n" ); document.write( "\n" ); document.write( "It is just the second time this problem is posted to the forum.\r \n" ); document.write( " \n" ); document.write( "\n" ); document.write( "First time it was posted and I answered it under this link\r \n" ); document.write( " \n" ); document.write( "\n" ); document.write( "https://www.algebra.com/algebra/homework/Finance/Finance.faq.question.1194023.html\r \n" ); document.write( " \n" ); document.write( " \n" ); document.write( "\n" ); document.write( " \n" ); document.write( " |