Suppose that you invest $3,000 at 6% interest, compound quarterly, for 5 years. use Table 11-1 to calculate the compound interes
t (in $) on your investment.
1 answer:
Answer:
Year Year Interest Total Interest Balance
1 $184.09 $184.09 $3,184.09
2 $195.39 $379.48 $3,379.48
3 $207.38 $586.85 $3,586.85
4 $220.10 $806.96 $3,806.96
5 $233.61 $1,040.57 $4,040.57
Step-by-step explanation:
Base amount: $3,000.00
Interest Rate: 6% (yearly)
Effective Annual Rate: 6.14%
Calculation period: 5 years
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The money will be triple after 15 years and 303 days.
What is compound interest?
Compound interest, also known as interest on principal and interest, is the practice of adding interest to the principal amount of a loan or deposit.
Given:
Principle (P) = $10,000
The amount will be triple.
So, Amount (A) = $30,000
Rate (r) = 7% = 0.07
The interest is compounded quarterly.
n = 4
We have to find the value of t.
Let,
Apply logarithm on both sides,
Hence, the money will be triple after 15 years and 303 days.
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