It said to calculate the compound interest earned.
here is the problem
Principal @ $3,000.00 / Rate of Interest is 7 percent / time is 1 year / compounded quarterly Now what would be the interest______________
2007-02-12 16:28:47 · 3 answers · asked by lizajane 1 in Science & Mathematics ➔ Mathematics
In the first quarter, the interest calculation is 3,000(1.0175)-3000. At the second quarter, the interest calculation will use the balance after the first interest was compounded, so [3000(1.0145)](1.0145)-3000=3000(1.0145)^2-3000. By now the pattern should be clear and the total interest after the 4th quarter should be: 3000(1.0145)^4-3000.
2007-02-12 16:35:59 · answer #1 · answered by Milton's Fan 3 · 0⤊ 0⤋
Interest = P*[(1 + r/100k)^k - 1]
= 3000 * [(1 + 7/400)^4 - 1]
= $215.58
2007-02-13 00:36:37 · answer #2 · answered by statistician 1 · 0⤊ 0⤋
The quarterly interest rate is 7%/4 = 0.0175
. 3,000
x0.0175
---------
. . . . 52.50 (1)
+3,000
---------
. 3,052.50
. . . . x0.0175
----------------
. . . 53.41875 (2)
+3,052.50
-----------------
. . 3,105.91875
. . . . . . . x0.0175
---------------------
. . . . 54.353578125 (3)
. +3,105.91875
------------------------
. . 3,160.272328125
. . . . . . . x0.0175
--------------------------
. . . . 55.3047657421875 (4)
.. +3,160.272328125
------------------------------
$3,215.5770938671875
rounded to the nearest cent =
$3,215.58
-$3,000.00
-------------
. . $215.58
2007-02-13 01:09:16 · answer #3 · answered by Helmut 7 · 0⤊ 0⤋