Find the future value and interest earned if $56,780 is invested at 5.3% compounded.
(a) quaterly for 23 quaters
(b) continously for 15 yrs.

Question

Find the future value and interest earned if $56,780 is invested at 5.3% compounded. 
(a) quaterly for 23 quaters 
(b) continously for 15 yrs.

anonymous · Answer

Can anyone help me??

anonymous · Answer

is the 5.3% aer, gross, interest per month per year ... need more information i'm afraid

radar · Answer

Use the compound interest formula.  I will try and put it here.

A=P(1+r/n)^nt     
Where A= balance
P = Principal
r= annual interest rate
n=compounding time in years

radar · Answer

For part b. use the interest formula for continious compounding which is
$$A=Pe ^{rt}$$  the e is approximately 271828 it is called the "natural base" it is used in many exponential problems.
Do you need further help?

radar · Answer

ooop I omitted the decimal point for the value of e.  It is    2.71828

radar · Answer

Part a.  The equation would appear like this:
56780(1+.053/4)^(4)(5.75)
The 5.75 is the 23 quarters converted to years.
56780(1.01325)^23=$76,855.95

radar · Answer

part b, I leave for you to try.