Suppose $10,000 is invested at an annual rate of displaystyle{2.4}% for 10 years. Find the future value if interest is compounded as follows

Joni Kenny

Joni Kenny

Answered question

2021-02-12

Suppose $10,000 is invested at an annual rate of 2.4% for 10 years. Find the future value if interest is compounded as follows

Answer & Explanation

komunidadO

komunidadO

Skilled2021-02-13Added 86 answers

Amount for compound interest:
If P amount of money is invested for t years at r% rate of interest which compounded n times annually then total amount of money to be received is calculated as per the formula given below:
A=P(1+rn)rt
(a)
It is given that the principal amount of money is $10,000, rate of interest is 2.4%, time is 10 years and the sum is compounded annually. This implies that the value of P is 10000, value of r is 0.024, value of t is 10 and value of n is 1.
A=10000(1+0.0241)1(10)
=10000(1+0.024)10
12676.51
Thus, is the future value will be $12,676.51 in the account after 10 years
(b)
It is given that the principal amount of money is $10,000, rate of interest is 2.4%, time is 10 years and the sum is compounded annually. This implies that the value of P is 10000, value of r is 0.024, value of t is 10 and value of n is 4.
A=10000(1+0.0244)4(10)
=10000(1+0.0244)40
12703.38
Thus, is the future value will be $12703.37 in the account after 10 years
(c)
It is given that the principal amount of money is $10,000, rate of interest is 2.4%, time is 10 years and the sum is compounded annually. This implies that the value of P is 10000, value of r is 0.024, value of t is 10 and value of n is 12.
A=10000(1+0.02412)12(10)
=10000(1+0.02412)120
12709.44
Thus is the future value will be $12,709.44 in the account after 10 years
(d) It is given that the principal amount of money is $10,000, rate of interest is 2.4%, time is 10 years and the sum is compounded annually. This implies that the value of P is 10000, value of r is 0.024, value of t is 10 and value of n is 365.
A=10000(1+0.024365)365(10)
=10000(1+0.024365)3650
12712.39
Thus is the future value will be $12712.39 in the account after 10 years
Jeffrey Jordon

Jeffrey Jordon

Expert2021-10-27Added 2605 answers

Answer is given below (on video)

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