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March 30, 2017

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find the accumulated value of an investment of 25,000 for 4 years at an interest rate of 5%, if the money is a compounded semiannually; b. coumpounded quaterly; c. compounded monthly d. coumpounded continuously.

  • math - ,

    I'll try the first one. The remaining cases are similar and serve as exercises for you (as they should).
    Principal, P = 25000
    Period, t = 6 months.
    Time, T = 4 years.
    Number of periods, n = 4/0.5=8
    Annual interest rate, = 5%
    Interest rate per period, i = 5%*0.5=2.5%

    Future value (compound interest)
    = P(1+i)^n
    = 25000*(1+2.5%)^8
    = 25000*1.2184
    = $30,460.07

  • math - ,

    309

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