what formula do i have to use for this problems.
Problem #4
John Lee saving account has a balance of $2449.After 7years what will be the amount of interest be at 8% compounded semiannually?
Problem #5
Southewest Dry cleaners believes that it will need new equipment in 5 years the equipment will cost $26,000 what lump sum should be invested today at 8% compounded semiannually to yield $26,000?
4. $2449 x (1.04)^14 = $4240.88
(The account is increased by 8%/2 = 4%, 7X2 = 14 times)
5. X * (1.04)^10 = $26,000.
Solve for X
what are the names of the formulas you used for them....
also for #5 i tryied solving for x i ended up with 25998.5976
For Problem #4, you used the formula for compound interest: A = P(1 + r/n)^(nt), where:
- A is the final amount
- P is the principal amount (initial balance)
- r is the interest rate (in decimal form, so 8% becomes 0.08)
- n is the number of times interest is compounded per year (semiannually, so twice a year)
- t is the number of years
In this case, the formula becomes: $2449 x (1 + 0.08/2)^(2 x 7) = $4240.88
For Problem #5, you used the same formula for compound interest to solve for the principal amount needed to yield a future value of $26,000. In this case, you need to rearrange the formula to solve for P:
P = A / (1 + r/n)^(nt)
So, the formula you used becomes: X = $26,000 / (1 + 0.08/2)^(2 x 5)
By solving this equation, you found that X ≈ $25,998.60. The small discrepancy in your answer (compared to $26,000) might be due to rounding errors during calculations.