Math Problem Statement
Suppose $2,000.00 dollars is invested in an account for 13 years. Find the value of the investment at the end of 13 years if the interest is: (a) 5.2% compounded annually: (b) 5.2% compounded semiannually: (c) 5.2% compounded quarterly: (d) 5.2% compounded monthly: (e) 5.2% compounded daily (ignore leap years): and answers
Solution
To calculate the future value of an investment with compound interest, we use the compound interest formula:
Where:
- is the future value of the investment
- is the principal amount (initial investment)
- is the annual interest rate (in decimal form)
- is the number of times the interest is compounded per year
- is the time the money is invested for, in years
The principal amount () is $2,000.00, the interest rate () is 5.2% or 0.052 in decimal, and the time () is 13 years.
(a) Compounded annually:
For annual compounding, .
(b) Compounded semiannually:
For semiannual compounding, .
(c) Compounded quarterly:
For quarterly compounding, .
(d) Compounded monthly:
For monthly compounding, .
(e) Compounded daily (assuming 365 days in a year):
For daily compounding, .
I'll calculate the values now.
Ask a new question for Free
By Image
Drop file here or Click Here to upload
Math Problem Analysis
Mathematical Concepts
Compound Interest
Exponential Growth
Financial Mathematics
Formulas
A = P(1 + r/n)^(nt)
Theorems
-
Suitable Grade Level
Grades 9-12
Related Recommendation
Compound Interest Calculation for $33800 Investment at 5% Interest
Future Value Calculation with Compound Interest for 5 Years at 4% Interest
Calculate Compound Interest on $2500 at 5% Monthly Compounded for 4 Years
Calculate Future Value of $5,000 Investment with 2% Quarterly Interest
Calculate Future Value of Investment with 12% Annual Compounding