posted by LI on .
$ 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 $
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.
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.
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.
First name: Henry. not Henry00.