Compound Interest Formula

Question

Can you help me figure this problem out?

Use the compound interest formula, solve the problem given. Round answers to the nearest cent.



Find the accumulated value of an investment of $15,000 for 5 years at an interest rate of 7%

if the money is:



a. compounded​ semiannually;

b. compounded​ quarterly;

c. compounded monthly

d. compounded continuously.

Answer 1

So we have the Compound Interest Fomular

A is final amount, P is initial principal balance; r is interest rate, n is number of times interest applied

I) In the case of a. compounded​ semiannually:

P will be $15,000, r will be 7%, n will be 2; t will be 5

Then we will have the approximate value of final amount is 21,159.

So the value of investment will be A minus our principal amount P (21,159-15,000) is $6158.

And so on.