jinzeang0
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Find the accumulated value of an investment of $20,000 for 7 years at an interest rate of 5.5% if the money is:
a. compounded semiannually
b. compounded quarterly
c. compounded monthly
d. compounded continuously.

---Round answers to nearest cent

Respuesta :

mhanifa

Answer:

  • See below

Step-by-step explanation:

Given:

  • Investment P = $20000
  • Time t = 7 years
  • Interest rate r = 5.5% = 0.055

a. compounded semiannually, n = 2

  • [tex]A = P*(1 + r/n)^{nt} = 20000(1+0.055/2)^{2*7} = 29239.88[/tex]

b. compounded quarterly, n = 4

  • [tex]A = P*(1 + r/n)^{nt} = 20000(1+0.055/4)^{4*7} = 29315.30[/tex]

c. compounded monthly, n = 12

  • [tex]A = P*(1 + r/n)^{nt} = 20000(1+0.055/12)^{12*7} = 29366.44[/tex]

d. compounded continuously

  • [tex]A = Pe^{rt}=20000*e^{0.055*7}=29392.29[/tex]

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