Answer:
(1) $11955.38
(2) $12228.62
(3) $12293.527
(4) $12326.6
Step-by-step explanation:
Compound interest is given by
A= P( 1 + r/n)^n*t
A= Final amount
P = initial amount = 6000
r = interest rate = 9% = 0.09
n = number of times interest applied per time period
t = number of time periods elapsed
(1) Compounded annually
n = 1 , t = 8
A = 6000( 1+ 0.09/1) ^1*8
A = 6000( 1.09) ^8 = $11955.38
(2) compounded quarterly
n = 4 , t = 8
A = 6000( 1+ 0.09/4) ^4*8
= 6000( 1.0225)^32 = $12228.62
(3) compounded monthly
n = 12 , t = 8
A = 6000( 1+0.09/12)^12*8 = $12293.527
(4) compounded continuously
A = P* e^rt
r = 0.09 , t = 8
= 6000* e^0.09*8
= 6000* e^0.72 = $12326.6
