0

# Want to see if I'm doing this question right and the calculations are also correct. I have done this question three times now and keep getting different answers

The formula is f(t) = P(1 + r/n)nt

\$62,000 is invested in a CD with the interest rate of 25%

Time in years is 18

the compounding periods  per year is quarterly

and then they ask to do it again but with the compounding periods per year is semi-annually

They want all work shown thank you

### 3 Answers by Expert Tutors

Tutors, sign in to answer this question.
Geeta S. | UC Berkeley Graduate: Passionate and Patient Teacher!UC Berkeley Graduate: Passionate and Pat...
5.0 5.0 (4 lesson ratings) (4)
0

f(t) = P(1 + r/n)nt where n is amount of periods within a year

P=\$62,000; r=0.25; t=18; n=4 (for quarterly) or n=2 (for semi-annually)

f(18) = 62,000 * (1 + 0.25/4) ^ (4*18) where n=4 (quarterly)

f(18) = 62,000 * (1 + 0.25/2) ^ (2*18) where n=2 (semi-annually)

Nataliya D. | Patient and effective tutor for your most difficult subject.Patient and effective tutor for your mos...
0

ƒ(t) = 62,000(1 + 0.25/4)4*18 = 62,000(1.0625)72 = 62,000 * 78.6473 = \$ 4,876,130.02
ƒ(t) = 62,000(1 + 0.25/2)2*18 = 62,000(1.125)36 = 62,000 * 69.421 = \$ 4,304,101.43

Grigori S. | Certified Physics and Math Teacher G.S.Certified Physics and Math Teacher G.S.
0

If cauterly compounded investment then r/n = 0.25/4 = 0.0625 each quarter.

The exponent nt = 4x18 = 72 quarters. Thus, if P = 62,000,

f(t) = 62,000x(1.0625)72 =4,876,130

For semiannual compounding r/n = .25/2 = 0.125  and nt = 2x18 = 36

Now you can finish.