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Math

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Dieter deposists $ 9000 inoan account that pays 10%/a compunded quarterly, after 3 threes the inerest rate changes to 9%/a compounded semi-annually, calculate the value of his investments 2 years after this change

  • Math -

    I'm assuming you mean the rate changes to 9 % after 3 years.

    Pt = Po(1+r)^n.

    r = (10%/4) / 100% = 0.025 = Quarterly % rate exprssed as a decimal.

    n = 3 yrs * 4 comp / yr. = 12 Comp. periods.

    Pt = $9000(1.025)^12 = $12,104 After 3
    years.

    r = (9%/2) / 100% = 0.045 = Semi-annual
    @ rate expressed as a decimal.

    n = 2 Comp./yr * 2 yrs = 4 Comp.periods

    Pt = $9000(1.045)^4 = $10.732.67.

    Total value = $12,104.00 + 10,732.67 =
    $22,836.67.

  • Math -

    Correction:

    Pt = $12,104(1.045)4 = $14,434.25. =
    Total value after 5 years.

  • Math -

    Correction:

    Accumalated Value = $12,104(1.045)^4
    = $14,434.25.

    (total value after 5 years

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