You have $30000 to invest. write the expression to find the total value of the investment if: a) you invest at 6% interest for 7 years compounded quar

Nann

Nann

Answered question

2021-05-28

You have $30000 to invest. write the expression to find the total value of the investment if: a) you invest at 6% interest for 7 years compounded quarterly b) you invest for 7 years compounded continuously.

Answer & Explanation

Gennenzip

Gennenzip

Skilled2021-05-29Added 96 answers

Use the compound interest formula: A=P(1+rn)nt where A is the final value, P is the present value, r is the rate (in decimal form), and n is compounding times per year, and t is the time in years.
Substitute P=3000, r=0.06 (for 6%), n=4, and t=7: A=3000(1+0.064)4(7)
A=3000(1.015)28
A ~ $4551.67
Use the continuos compounding interest formula: A=Pcrt
where A is the final value, P is the present value, r is the rate (in decimal form), and t is the time in years.
Substitute P=3000, r=0.06 (for 6%), and t=7: A=3000c0.06(7)
A=3000c0.42
A ~ $4365.88

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