SOLUTION: Determine the interest earned of a 12-year investment with an interest rate of 5.3 %/a compounded weekly, if future value is $41800.
A) $ 17 630.77 B) $ 356.07 C) $ 14404.36 D)
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-> SOLUTION: Determine the interest earned of a 12-year investment with an interest rate of 5.3 %/a compounded weekly, if future value is $41800.
A) $ 17 630.77 B) $ 356.07 C) $ 14404.36 D)
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Question 1102512: Determine the interest earned of a 12-year investment with an interest rate of 5.3 %/a compounded weekly, if future value is $41800.
A) $ 17 630.77 B) $ 356.07 C) $ 14404.36 D) $19 663.67 Answer by greenestamps(13200) (Show Source):
If the initial amount is A, then the amount after 12 years, compounded weekly (52 times a year), with an annual interest rate of 5.3%, is
Given that the future value is $41800, the original amount is
The original amount is $22136.33; the future value is $41800; the interest is
Answer D.
Note there is a faster way to get to the interest amount, after we find that
In that equation, A*1 is the original amount; A*0.8883 is the interest. So the fraction of the total future value of $41800 that is interest is 0.8883/1.8883. So the amount of interest is
