Get the information you need quickly and easily with IDNLearn.com. Get prompt and accurate answers to your questions from our community of experts who are always ready to help.
a) The future value, principal plus interest, with compound interest on a principal of $8,704.56 at a rate of 4% per year compounded 2 times per year over 8 years is $11,949.50.
b) The future value, principal plus interest, with compound interest on a principal of $8,704.56 at a rate of 4% per year compounded continuously over 8 years is $11,987.29.
The future value can be determined using an online finance calculator.
Data and Calculations:
Principal (P): $8,704.56
Annual Rate (R): 4%
Compound (n): Compounding Semi-Annually
Time (t in years): 8 years
Result:
A = $11,949.50
A = P + I where
P (principal) = $8,704.56
I (interest) = $3,244.94
First, convert R as a percent to r as a decimal
r = R/100
r = 4/100
r = 0.04 rate per year,
Then solve the equation for A
A = P(1 + r/n)nt
A = 8,704.56(1 + 0.04/2)(2)(8)
A = 8,704.56(1 + 0.02)(16)
A = $11,949.50
Using the formula A = Pert
Principal (P): $8,704.56
Annual Rate (R): 4%
Compound (n): Compounding Continuously
Time (t in years): 8 years
Result:
A = $11,987.29
A = P + I where
P (principal) = $8,704.56
I (interest) = $3,282.73
First, convert R as a percent to r as a decimal
r = R/100
r = 4/100
r = 0.04 rate per year,
Then solve the equation for A, using the mathematical constant, e = 2.71828
A = Pert
A = 8,704.56(2.71828)(0.04)(8)
A = $11,987.29
Thus, while the future value of $8,704.56 at a rate of 4% per year compounded semiannually over 8 years is $11,949.50, the future value of $8,704.56 at a rate of 4% per year compounded continuously over 8 years is $11,987.29.
Learn more about compounding interest at https://brainly.com/question/24274034
#SPJ1