Answer to Question #329363 in Mechanical Engineering for Jhonny

Question

1. Determine the accumulated value of P2000.00 in 5 years if it is invested at 11%

compounded quarterly. (Please show solution with correct answer)

Answer 1

A = P(1 + r/n)^nt

P: the principal, amount invested

A: the new balance

t: the time, years

r: the rate, (in decimal form)

n: the number of times it is compounded.

Compounded quarterly, n = 4:

A = 2000.00(1 + 0.11/4)⁽⁴⁾⁽⁵⁾ = 2000(1.0275)⁽²⁰⁾ = $3440.86