Question 1160383: Hi! I know I need to solve this question with the A=P(1+r/n)^nt but when I submitted my answer I got it incorrect and I'm not sure where I went wrong.
If $17900 is invested at an interest rate of 7% per year, find the value of the investment at the end of 5 years for the following compounding methods.
Annual
Semi-annual
Monthly
Daily
Continously
I got both the monthly ($25375.5) and the continously ($25401.3) answers correct but I don't know where I went wrong for annual, semi-annual, and daily.
Thank you for any help in advance.
Answer by Boreal(15235)   (Show Source):
You can put this solution on YOUR website! annual is 17900(1.07)^5=$25,105.68
semi-annual is 17900(1.035)^10=$25,249.72
monthly is 17900(1+(.07/12))^60=$25375.49, as you wrote
daily is 17900(1+(.07/365))^1825=$25,400.46
continuously is 17900*e^(0.35)=$25401.31
rounding too soon can be a problem, but the amounts should gradually increase to continuously
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