Tuesday

July 22, 2014

July 22, 2014

Posted by **marie** on Sunday, August 14, 2011 at 5:47pm.

you deposit $12,000 in an account that pays 6.5% interest compounded quarterly.

A. find the future value after one year?

B. Use the future value formula for simple interest to determine the effective annual yield?

- math -
**Henry**, Sunday, August 14, 2011 at 8:29pmA. Pt = Po(1+r)^n,

r = 6.5% / 4 = 1.625% = 0.01625 = Quarterly % rate expressed as adecimal.

n = 4 comp./yr * 1 yr = 4 compounding

periods.

Pt = 12,000(1.01625)^4 = $12,799.22.

B. APY = I/Po.

I=Pt - Po = 12,799.22 - 12,000 = 799.22

= Interest.

APY=(799.22/12000)*100% = 6.66%.=Annual

Percentage Yield.

- math -
**Henry**, Sunday, August 14, 2011 at 8:39pmFormula: APY = (Pt-Po) / Po

**Related Questions**

math - what formulas do i use for this: Investments Suppose $10,000 is invested ...

Help math calc - Find the future value of $700 deposited at 3% for 9 years if ...

math - Computing future value calculate the future value of a retirement account...

math - Rob has a balance of 1695$ in his bank account The account pays 2.9% ...

financal problems - Computing future value. Calculate the future value of a ...

personal finances - computing future value. calucale the future value of a ...

math - If you put $ 6,000 in a savings account that pays interest at the rate of...

FINANCE - You deposit $2,000 in an account that pays 8% interest compounded ...

alegbra - Find the future value, using the future value formula and a calculator...

algebra/I appreciate your help - Find the future value, using the future value ...