Question

Find the accumulated value of an investment of $20,000 for 7 years at an interest rate of 5.5% if the money is:

Answer 1

Answer:

• See below

Step-by-step explanation:

Given:

• Investment P = $20000
• Time t = 7 years
• Interest rate r = 5.5% = 0.055

a. compounded semiannually, n = 2

• $A = P*(1 + r/n)^{nt} = 20000(1+0.055/2)^{2*7} = 29239.88$

b. compounded quarterly, n = 4

• $A = P*(1 + r/n)^{nt} = 20000(1+0.055/4)^{4*7} = 29315.30$

c. compounded monthly, n = 12

• $A = P*(1 + r/n)^{nt} = 20000(1+0.055/12)^{12*7} = 29366.44$

d. compounded continuously

• $A = Pe^{rt}=20000*e^{0.055*7}=29392.29$

Answer 2

Answer:

147,700 and A

Step-by-step explanation: