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Question 919895: Can someone please explain to me how to solve this question?
Rebekah's commission rate is 16%. She invests her commission from the sale of 18,000$ worth of merchandise at the interest rate of 5%, compounded quarterly. How much is Rebekah's investment worth after 6 months?
Answer by stanbon(75887)   (Show Source):
You can put this solution on YOUR website! Rebekah's commission rate is 16%. She invests her commission from the sale of 18,000$ worth of merchandise at the interest rate of 5%, compounded quarterly. How much is Rebekah's investment worth after 6 months?
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Her commission before investing it:: 0.16*18000 = 2880
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Formula for compound investing::
A(t) = P(1+(r/n))^(nt)
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Value of her investment::
A(1/2) = 2880(1+(0.05/4))^(4*(1/2)
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A(1/2) = 2880(1.0125)^(2)
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A(1/2) = 2880*1.025
A(1/2) = $2952.45
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Cheers,
Stan H.
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