Jasmine invests $1500 in an account that earns an interest rate of 11% compounded?

Question

continously. Will she have enough money in 4 years to put a 2500 down payment ona new car? explain.

Answer 1

if you begin with 1500 and it gains interest at 11% then your equation is 1500(1.11)^X ....where X is the number of years (you can find any given amount in any year...even 123456 years:D) so your equation turns into:
f(4)=1500(1.11)^4
f(4)=2277.11
no she will not have enough money to make a 2500 down payment...however in five years she will...
f(5)=1500(1.11)^5
f(5)=2527

Answer 2

First of all, it is important to phrase your question in such a way that the answer is unambigious. The first problem is the claim of "11% interest rate". Since it is a rate, you have to define the time. Usually, interest rates are given in terms of per annum, but there are banks that give out interests in terms of per 3 months. The other problem would be the claim of "compounded interest". Again, is it compounded yearly or compounded monthly? One should not leave out such details when asking a question of such.

Assuming that you mean 11% p.a compounded yearly and Jasmine has only $1500 to begin with, then the amount of money she will have after 4 years would only be $2277.11 ( (1.11 ^ 4) * 1500). As such she would not be able to pay for the down payment of $2500 in 4 years.

Answer 3

compounded continously????

Not daily, not monthly, quarterly, yearly? I doubt if she would have enough.

1500 X 11%=165
1650 X 11%=181.50
1831.50 X 11%=201.47
2032.97 X 11%=223.63
Total = 2256.60

Answer 4

No because 2500>1500e^(.11*4) make sure some one checks that I haven't done that stuff in a while.