Question

1. You deposit $2000 in an account earning 8% interest compounded monthly. How much will you have in the account in 15 years?

2. Find the time required for an investment of 5000 dollars to grow to 9000 dollars at an interest rate of 7.5 percent per year, compounded quarterly.
Round your answer to two decimal places
___t years.

3. You deposit $3000 in an account earning 5% interest compounded monthly. How much will you have in the account in 5 years?

Answer 1

A= final amount

P=principle

r= rate of interest

n= number of times interest applied per time period

t= time period

1)

P=$2000

r=8%=0.08

n=12

t=15

A=2000(1+0.08/12)^12*15

=6613.84

at the end of the 15th year, the account has a balance of $ 6613.84.

2)

t=time period

A=Final amount

P=Principle

n= number of times interest applied per time period

r= interest rate

ln= antilog

Given,

A=$9000

P=$5000

n=4

r=7.5%=0.075

t=ln(9000/5000)/4[ln(1+0.075/4)]

=ln(1.8)/4[ln(1.01875)

=0.58778/4*0.018576

=0.58778/0.0743

=7.91

the required time of investment is 7.91 years

3,

A= final amount

P=principle

r= rate of interest

n= number of times interest applied per time period

t= time period

Given

P=$3000

r=5%=0.05

n=12

t=5years

A=3000(1+0.05/12)^(12*5)

=3850.07

at the fifth year account balance is $3850.07