What is the value on January 1, 2026, of $40,000 deposited on January 1, 2019, which...

What is the value on January 1, 2026, of $40,000 deposited on January 1, 2019, which accumulates interest at 12% compounded annually?

What is the value on January 1, 2025, of $10,000 deposited on July 1, 2019, which accumulates interest at 16% compounded quarterly?

Expert Solution

1)

Amount deposited = $40,000

Period = 7 years

Interest rate = 12%

Value on January 1, 2026 = $40,000 * (1 + 0.12) ^ 7

= $40,000 * 2.21068

= $88,427

2)

Amount deposited = $10,000

Nos of quarterly periods = 5.5*4 = 22 periods

Quarterly rate of interest = 16% / 4 = 4%

Value on Jan 1, 2025= $10,000 * (1 + 0.04) ^ 22

= $10,000 * 2.36992

= $23,699

ekkarill92 answered 2 years ago

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