SOLUTION: The following investment requires table factors for periods beyond the table. Using Table 11-1, create the new table factor, rounded to five places, and calculate the compound amou

Algebra ->  Finance -> SOLUTION: The following investment requires table factors for periods beyond the table. Using Table 11-1, create the new table factor, rounded to five places, and calculate the compound amou      Log On


   

Question 1172643: The following investment requires table factors for periods beyond the table. Using Table 11-1, create the new table factor, rounded to five places, and calculate the compound amount (in $, rounded to the nearest cent.)
Table 11-1: https://www.webassign.net/brecmbc9/11-table-1.pdf
Principal: 17,000
Time period (years): 29
Nominal rate: 6%
interest compounded: annually
New table factor: _______
Compound amount: ________
I got stuck with this one. I divided nominal rate and periods per year to get the interest rate per period. (6/1 = 6%) I then multiplied interest compound (1) to time period (29 years). I divided 29/2 since it wasn't on table 11-1 (link above) and got 14.5, which is also not in the table..Not sure how to continue with this problem.
Found 2 solutions by Solver92311, Theo:
Answer by Solver92311(821) About Me  (Show Source):
You can put this solution on YOUR website!



That stupid table is a waste of your time.



Where is the future value of a present value invested at an interest rate of expressed as a decimal (percentage divided by 100), for years compounded times per year. This formula can be written:



The table is made by setting and then running the formula for various values of and

The reason I say that the table is a waste of time is that since you have a calculator built into your computer that is capable of quickly performing these calculations you can get the answer to your questions without having to find a table that specifically has the input values that you need.

So for the New Table Factor:



And for the compound amount:



John

My calculator said it, I believe it, that settles it

From
I > Ø

Answer by Theo(13342) About Me  (Show Source):
You can put this solution on YOUR website!
looks like you're having a lot of fun with these tables.
this is similar to the last problem i did for you involving present value.
in this one, it looks like you have to use the formula at the bottom of the page to calculate future value.

the formula at the bottom of the page is FV = (1 + r) ^ n

the time period is in years
the interest rate per time period is 6% / 1 = 6%.
the number of time periods is 29 years * 1 = 29.

in the formula, you have to use the rate, not the rate percent.
the rate is the percent / 100.
that makes your rate equal to .06.

your future value factor will be (1 + .06) ^ 29 = 5.418387899.
round that to 5 decimal places to get 5.41839
multiply 17000 by that to get a future value of 92112.63.