Question

Use the compound interest formulas A=P1+

Answer 1

The accumulated value of an investment if the money is a. compounded​ semiannually; b. compounded​ quarterly; c. compounded​ monthly; d. compounded continuously is $30731.4 $ , $30785.98  $30823.14 , 30841.95

What is Interest ?

Interest is the amount received by a person as a result of investing certain amount of money for a certain period of time.

It is given that

Principal = $ 25000

Time = 3 years

Interest Rate = 7 %

The amount is given by

$\rm A = P( 1+ \dfrac{r}{n}) ^{nt}$

Compounded semiannually

n = 2

Compounded Quarterly

n = 4

Compounded Monthly

n =12

Compounded Continuously

P = P₀ $\rm e ^{rt}$

Therefore the accumulated value for

compounded Semiannually is

$\rm A = 25000( 1+ \dfrac{7}{200}) ^{2*3}$

A = $30731.4

Compounded Quarterly

$\rm A = 25000( 1+ \dfrac{7}{400}) ^{4*3}$

A = $30785.98

Compounded Monthly

$\rm A = 25000( 1+ \dfrac{7}{1200}) ^{12*3}$

A = $30823.14

Compounded Continuously

$\rm P = 25000 e ^{ 7 * 3 }$

P = $30841.95

Therefore the accumulated value of an investment if the money is

a. compounded​ semiannually; b. compounded​ quarterly; c. compounded​ monthly; d. compounded continuously is

$30731.4 $ , $30785.98  $30823.14 , 30841.95

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