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Math

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$ 2631 is deposited into an account for 15 years. Determine the accumulation if interest is 8.01 % compounded
(a) monthly, (b) daily, (c) continuously.
(Round-off your answers to the nearest cent.)

The accumulation based on

(a) monthly compounding is $ ;

(b) daily compounding is $ ;

(c) continuous compounding is $

Thanks

  • Math - ,

    Pt = Po(1+r)^n.

    a. r = (8.01%/12) / 100% = 0.006675 =
    Monthly % rate expressed as a decimal.

    n = 12 comp./yr * 15 yrs. = 180 comp.
    periods.

    Pt = 2631(1.006675)^180 = $8713.48.

    b. Pt = Po(1+r)^n.

    r = (8.01%/360) / 100% = 0.0002225 =
    daily % rate expresed as a decimal.

    n = 360 comp./yr * 15 yrs. = 5400 comp.
    periods.

    Plug the calculated values of r and n
    into the given EQ and solve.

    c. Pt = Po*e^rt.

    r = 8.01% / 100% = 0.0801 = Annual % rate expressed as a decimal.

    rt = 0.0801/yr * 15yrs. = 1.2015.

    Pt = 2631*e^1.2015 = $8748.34.

  • Math - ,

    First name: Henry. not Henry00.

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