Using the compound interest formula complete question A and B: A) An account is
ID: 3112555 • Letter: U
Question
Using the compound interest formula complete question A and B:
A) An account is opened with an initial deposit of $7,500 and earns 3.9% interest compounded semi-annually. What will the account be worth in 40 years? (Round your answer to the nearest cent.)
B)An account is opened with an initial deposit of $8,500 and earns 3.5% interest compounded semi-annually for 20 years. How much more would the account have been worth if the interest were compounding weekly? (Round your answer to the nearest cent.)
Explanation / Answer
A)
A = P(1+r/100n)nt
P = principal = 7500; n = 2 ; r = 3.9%; t =40
A = 7500*(1+3.9/200)2*40
A = 35,159.255 $
B)
(1)
A = P(1+r/100n)nt
P = principal = 8500; n =2 ; r = 3.5%; t =20
A = 8500*(1+3.5/200)2*20
A1 = 17013.57$
(2)
A = P(1+r/100n)nt
P = principal = 8500; n = 52 ; r = 3.5%; t =20
A = 8500*(1+3.5/5200)52*20
A2 = 17112.86 $
A2 - A1 = 99.29$
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