In: Statistics and Probability

You invest $2600 in an account that pays an APR of 6%.

(a) What is the value of the investment after three years if interest is compounded yearly? Round your answer to the nearest cent.

The value of the investment after three years is $ .

(b) What is the value of the investment after three years if
interest is compounded monthly? Round your answer to the nearest
cent.

The value of the investment after three years is $ .

**SOLUTION:**

From given data,

**You invest
$2600 in an account that pays an APR of 6%.**

Compound interest formula is given by

A = P ( 1 + r / n)^{nt}

where,

A -> Final amount

P -> Principal

r -> Rate of interest (decimal)

n -> Number of times interest is compounded per year

t -> Time in years

**(a) What is the
value of the investment after three years if interest is compounded
yearly**

A = P ( 1 + r / n)^{nt}

Here

P = 2600

APR(Annual percentage rate ) is 6%.

That is

r = 6% = 6/100 = 0.06

interest is compound yearly

Therefore

n = 1

we have to find amount after 3 years, That is t = 3

A = 2600 ( 1 + 0.06 / 1)^{1*3 }

= 2600 * (1.06)^{3}

= 3096.6416

1$ = 1 cent

**That is , value of investment after 3 years is = $
3096.6416**

**(b) What is the
value of the investment after three years if interest is compounded
monthly**

A = P ( 1 + r / n)^{nt}

Here

P = 2600

APR(Annual percentage rate ) is 6%.

That is

r = 6% = 6/100 = 0.06

interest is compound monthly

1 year = 12 months

Therefore

n = 12

we have to find amount after 3 years, That is t = 3

A = 2600 ( 1 + 0.06 / 12)^{12*3 }

= 2600 * (1.005)^{36}

= 3111.37

1$ = 1 cent

**That is , value of investment after 3 years is = $
3111.37**

If you invest $7,000 into a savings account at an annual
interest rate of 8% (APR), compounded semi-annually, how much will
you have in the savings account after 11 years? Enter your response
below (rounded to 2 decimal places).

If you invest $1,000 into a savings account at an annual
interest rate of 3% (APR), compounded semi-annually, how much will
you have in the savings account after 14 years?

If you invest $5,000 in months 2 and 3 in an account that earns
2.00% APR, compounded monthly, , how much can you withdraw (equal
amounts) in months 5 and 6 ?

Your bank offers you a savings account with an APR OF 6%
compounded monthly.a) What is the EAR?b) What is the monthly and quarterly effective rate?c) What is the EAR if the APR is 6% compounded weekly?

An savings account pays 3% interest every quarter on the saved
funds. What is the APR? What is the EAR?

You invest $7,000 into a savings account that pays an annual
interest rate of 12.00%. How much would you have in your account
after 12 years?A.$20,549B.$24,010C.$27,272D.$30,343E.$33,231F.$35,942G.$38,483H.$40,861

If you invest $1,632 today and in years 1, 2 and 3 in an account that earns 4.28% APR (compounded annually), how much will you have in the account in 17 years?

you
deposit $500 today in a savings account that pays 6% interest,
compounded annually. How much will your account be worth at the end
of 40 years?

If you put $6,470.74 in a savings account that pays 4% for one
year what is the amount of money you will have at the end of the
one year?

3. Jose deposits $150 at the end of each
month into an account that pays 6%
interest compounded monthly . After 8
years of deposits, what is the account
balance?

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