A bank features a savings account that has an annual percentage rate of r 4% wit

Question

A bank features a savings account that has an annual percentage rate of r 4% with interest compounded weekly. Andrew deposits $8,500 into the account. The account balance can be modeled by the exponential formula r nt S(t)=P(1+n) ,where S is the future value, P is the present value, r is the annual percentage rate, n is the number of times each year that the inerert is compounded, and t is the tirme in years (A) What values should be used for P, r, and n? n= (B) How much money will Andrew have in the account in 7 years? Answer = $ Round answer to the nearest penny

Explanation / Answer

Solution:

1.

use;

P = $8500

r = 0.04

n= 12*30/7 = 52 (Approx)

t = 7 years

Hence;

After 7 years he has:

8500(1+0.04/52)^52*7

=> $11245.39

2.

use;

P= $5000

r = 0.045

n= 2

Hence;

renee have this much in 7 years =5000(1+0.045/2)^2*7

=> $6527.417

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