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Posted by **Tina** on Saturday, January 21, 2012 at 7:16pm.

A - annually

B - quarterly

C - monthly

what is the amount after 4 years? How much interest is earned?

- Finance math -
**Henry**, Sunday, January 22, 2012 at 8:14pmA. Pt = Po*(1+r)^n.

r = 6%/100% = 0.06 = Annual % rate expressed as a decimal.

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

periods.

Pt = 100*(1.06)^4=$126.25 After 4 yrs.

Int. = Pt - Po = 126.25 - 100 = $26.25.

B. Pt = Po*(1+r)^n.

r = (6%/4) / 100% = 0.015 = Quarterly

% rate expressed as a decimal.

n = 4 comp./yr. * 4yrs = 16 compounding

periods. Calculate Pt and Int.

C. Pt = Po*(1+r)^n.

r = (6%/12) / 100% = 0.005 = Monthly %

rate expressed as adecimal.

n = 12 comp./yr * 4yrs = 48compounding

periods. Calculate Pt and Int.

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