Find the amount of money in an account after 8 years if $2700 is deposited at 8% annual interest compounded quarterly.
2006-08-29 06:27:43 · 6 answers · asked by laural8477 3 in Education & Reference ➔ Homework Help
a)5088.26
b)5057.05
c)4997.51
d)5109.63
2006-08-29 06:38:14 · update #1
The answer is a)
2700* (1+0.02)^ 32 = 5088.26
(2% quarterly rate and 32 quarters are used as the compounding period is quarter).
2006-08-29 07:10:37 · answer #1 · answered by rgsoni 2 · 0⤊ 0⤋
do u have a business calculator? u have to use that formula FV and PV (future value and present value)
if u want to do it by hand, quarterly means 4 times a year. that means 8% of 2700 = $216. so after the 1st quarter it is 2700 +216 = $2916. u have to do that over and over again per quarter for 8 years...!! that is why u NEED the formula and the business calculator....good luck
2006-08-29 13:40:07 · answer #2 · answered by sasmallworld 6 · 0⤊ 0⤋
it will be $2700(1.02)^32
for 32 quarters @ 2% interest per quarter
2006-08-29 13:36:11 · answer #3 · answered by raj 7 · 0⤊ 0⤋
multiply the deposit by .08,then by 4,then take that number and do it again for every year.Or somethin` like that.
2006-08-29 17:40:39 · answer #4 · answered by Rich B 7 · 0⤊ 0⤋
need to use your calculator to figure how much interest accumalates in 8yrs then add to amt. deposited.
2006-08-29 13:34:34 · answer #5 · answered by longroad 5 · 0⤊ 0⤋
call a bank...they r real good at that
2006-08-29 13:34:00 · answer #6 · answered by curious115 7 · 0⤊ 0⤋