SOLUTION: Hello!! So here is my question If 8700 dollars is invested at an interest rate of 8 percent per year, find the value of the investment at the end of 5 years for the following co

Question 533178: Hello!! So here is my question
If 8700 dollars is invested at an interest rate of 8 percent per year, find the value of the investment at the end of 5 years for the following compounding methods.
Annual:
Semiannual:
Monthly:
Daily:
Continuously:
Im in desperate need!!! :) Thank You!
Answer by ankor@dixie-net.com(22740) (Show Source): You can put this solution on YOUR website!
If 8700 dollars is invested at an interest rate of 8 percent per year, find the value of the investment at the end of 5 years for the following compounding methods.
:
If know a couple interest formulas, you would not be desperate
A = P^nt
Where
A = resulting amt
P = initial amt
r = annual interest rate in decimals
n = no. of compounding periods per year
t = no. of years
:
Annual: that's once a year, n=1
A = 8700^(1*5)
A = 8700*1.08^5
A = $12,783.15
:
Semiannual: that's twice a year, n=2
A = 8700^(2*5)
A = 8700*1.04^10
A = $12,878.13
:
Monthly: n=12
A = 8700^(12*5)
A = 8700*1.00667^60
A = $12,964.23, not an exact value here, due to rounding 1.00666666
:
Daily: n = 365
A = 8700^(365*5)
A = 8700*1.00021918^1825
A = $12,978.35
:
Continuously:
This involves a simpler formula A = P*e^rt, where r = int rate, t = time in yrs
A = 8700*e^(.08*5)
A = 12,978.87
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