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
------------------------
2. Twice a year
A(30) = 1000(1+(0.07/2))^(2*30)
A(30) = 1000(1.035)^60
--------------
Cheers,
Stan H.
------------
Answer by josmiceli(19441)  (Show Source):
|
|
|
