SOLUTION: Hi there, I keep getting the wrong answer €6,235.10 to this question. What am I doing wrong? I divided the interest by 4 and the year by 4.
Question: A person saves €4,429 in a
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-> SOLUTION: Hi there, I keep getting the wrong answer €6,235.10 to this question. What am I doing wrong? I divided the interest by 4 and the year by 4.
Question: A person saves €4,429 in a
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Question 675210: Hi there, I keep getting the wrong answer €6,235.10 to this question. What am I doing wrong? I divided the interest by 4 and the year by 4.
Question: A person saves €4,429 in a bank account at the end of each quarter. The bank offers a return of 4.3% p.a compounded quarterly. How much will this investment be worth after 8 years? Answer by Edwin McCravy(20055) (Show Source):
You can put this solution on YOUR website! A person saves €4,429 in a bank account at the end of each quarter. The bank offers a return of 4.3% p.a compounded quarterly. How much will this investment be worth after 8 years?
You multiply the years by 4, not divide. But your answer is very
close to the actual answer, €6235.99. Perhaps you are rounding off
too much or not using a scientific calculator.
The formula is
A = P(1 + )nt
where
A = final amount = ?
P = beginning amount = €4,429
r = rate expressed as a decimal = 0.043
n = the number of times per year the interest is compounded = 4 (quarterly)
t = the number of years = 8
A = P(1 + )nt
A = 4429(1 + )4·8
A = 4429(1 + 0.01075)32
A = 4429(1.01075)32
A = 6235.993882
Round to nearest cent and put an euro mark in front:
Answer: €6235.99
Edwin
