Question

In: Finance

William puts $8,000 in the bank today. The quoted interest rate is 8%, and the bank...

William puts $8,000 in the bank today. The quoted interest rate is 8%, and

the bank compounds interest quarterly. If William makes no further deposits, how

much will he have at the end of 9 years? (to the nearest dollar)

     a. $13,760

     b. $16,319

     c. $10,146

     d. $15,992

Please show the process

Solutions

Expert Solution

A/c balance after 9 years PV×(1+r)^n
Here,
1 Interest rate per annum 8.00%
2 Number of years                                   9
3 Number of compoundings per per annum                                   4
1÷3 Interest rate per period ( r) 2.00%
2×3 Number of periods (n)                                 36
Present value (PV) $                      8,000
A/c balance after 9 years $                    16,319
8000*(1+2%)^36

jeff jeffy answered 3 years ago
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