Algebra - Question about Answers
posted by Kylie .
I would like to know if my answers are correct.
A principal of 6500.00 is invested in an account paying an annual rate of 4%. Find amount in acct after 4 years if acct is compounded semiannually, quarterly and monthly.
Semiannually - 7615.79
Quarterly - 7621.76
Your answers look good.
I see you used 1.0033 for 1/3 %. If you carry out a few more places, say, 1.003333333, you get 7625.79
So, depending on how exact you want to be, you're ok.
Not sure whether the banks just use 1 + (.04/12) as the monthly rate, which would give the higher amount, since the extra precision would be built into the calculation.