SOLUTION: The formula for calculating the amount of money returned for an initial deposit into a bank account or CD (certificate of deposit) is given by {{{P = A(1+r/n)^(n*t)}}} A is t

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Question 193045: The formula for calculating the amount of money returned for an initial deposit into a bank account or CD (certificate of deposit) is given by
P+=+A%281%2Br%2Fn%29%5E%28n%2At%29
A is the amount of the return.
P is the principal amount initially deposited.
r is the annual interest rate (expressed as a decimal).
n is the number of compound periods in one year.
t is the number of years.
Carry all calculations to six decimals on each intermediate step, then round the final answer to the nearest cent.
Suppose you deposit $3,000 for 9 years at a rate of 6%.
a) Calculate the return (A) if the bank compounds annually (n = 1). Round your answer to the hundredth's place.
Answer by Edwin McCravy(20056) About Me  (Show Source):
You can put this solution on YOUR website!


P+=+A%281%2Br%2Fn%29%5E%28n%2At%29

Take out the A and put 3000 in its place:

P+=+3000%281%2Br%2Fn%29%5E%28n%2At%29

Take out the r and put 0.06 in its place:

P+=+3000%281%2B0.06%2Fn%29%5E%28n%2At%29

Take out the t and put 9 in its place:

P+=+3000%281%2B0.06%2Fn%29%5E%28n%2A9%29

Write n%2A9 as 9n

P+=+3000%281%2B0.06%2Fn%29%5E%289n%29

a) Calculate the return (A) if the bank compounds annually (n = 1). Round your answer to the hundredth's place.

P+=+3000%281%2B0.06%2Fn%29%5E%289n%29

Take out the n and put  " *1 " in its place

P+=+3000%281%2B0.06%2F1%29%5E%289%2A1%29

We can erase the 1's

P+=+3000%281%2B0.06%29%5E%289%29

P+=+3000%281.06%29%5E9

Raise 1.06 to the 9th power on your calculator
and get 1.689479, rounded to 6 decimal places.

Take out the %281.06%29%5E9 and put " 1.689479 " in its place 

P+=+3000%281.689479%29

Multiply 3000 by 1.689479 and you get

P+=+5968.437

Rounding to the nearest cent:

P = $5968.44

Edwin