Try the fastest way to create flashcards
Question

Use the appropriate compound interest formula to compute the balance in the following accounts after the stated period of time.

$10,000\$ 10,000 is invested for 1010 years with an APR\mathrm{APR} of 2%2 \% and quarterly compounding.

Solution

Verified
Answered 2 years ago
Answered 2 years ago
Step 1
1 of 3

To get the accumulated value of an investment of $10,000\textcolor{#c34632}{\$10,000} for 10 years\textcolor{#c34632}{10 \ \text{years}} years at an interest rate of 2%\textcolor{#c34632}{2\%} compounded quarterly, we will use this formula:

A=P(1+APRn)nY\begin{aligned} A = P \left ( 1 + \dfrac{APR}{n} \right )^{nY} \end{aligned}

where AA is the accumulated balance after YY years, PP is the starting principal, APRAPR is the annual percentage rate in decimal form, nn is the compounding periods per year, and YY is the time in years.

Create a free account to view solutions

Create a free account to view solutions

Recommended textbook solutions

Mathematics for Business and Personal Finance 1st Edition by Lange, Rousos

Mathematics for Business and Personal Finance

1st EditionISBN: 9780078805059 (1 more)Lange, Rousos
4,857 solutions
Using and Understanding Mathematics: A Quantitative Reasoning Approach 6th Edition by Jeffrey O. Bennett, William L. Briggs

Using and Understanding Mathematics: A Quantitative Reasoning Approach

6th EditionISBN: 9780321914620Jeffrey O. Bennett, William L. Briggs
2,970 solutions
Financial Algebra 1st Edition by Richard Sgroi, Robert Gerver

Financial Algebra

1st EditionISBN: 9780538449670 (1 more)Richard Sgroi, Robert Gerver
2,606 solutions
Financial Algebra: Advanced Algebra with Financial Applications 2nd Edition by Richard Sgroi, Robert Gerver

Financial Algebra: Advanced Algebra with Financial Applications

2nd EditionISBN: 9781337271790Richard Sgroi, Robert Gerver
3,016 solutions

More related questions

1/4

1/7