Question

Suppose you want to invest $500 into a bank account that earns 3.4% compounding weekly. After 4 years how much money will you have in your account?

Answer 1

$573 was the answer I got

Answer 2

A = P(1+r/n)^(n*t)

plug in

P = 500
r = 0.034
n = 52 (there are 52 weeks in a year)
t = 4

to get

A = 500(1+0.034/52)^(52*4)

I'll let you evaluate that

Answer 3

572.82 when rounded thank you so much!! @jim_thompson5910 could you help me with one question similar or even a formula would help!

Answer 4

suppose you own a car that is worth 10,000. It is depreciating by a rate of 15%. How long will it take for your car to be worth 4,000? Round you answer to the nearest tenth. I know it is about 6 years, but I am not sure how to find the answer properly in order to find it to the nearest tenth

Answer 5

use the formula

FV = PV*(1-r)^t

where,

FV = final value
PV = present value
r = rate of depreciation (how much as a percentage it decreases every year)
t = time (in years)

In this case,

FV = 4000
PV = 10000
r = 0.15
t = unknown (solving for it)

so this means

FV = PV*(1-r)^t

4000 = 10000*(1-0.15)^t

now solve for t

Answer 6

am I going to have to use a log?

Answer 7

yes

Answer 8

any time you need to isolate an exponent, you use logs

Answer 9

ohh okay I think that is where I was getting stuck

Answer 10

I am getting 9.2.. but that is way off from my original thought!

Answer 11

so sorry I am new with logarithms and they are throwing me off.

Answer 12

4000 = 10000*(1-0.15)^t


4000/10000 = (1-0.15)^t


0.4 = (1-0.15)^t


log(0.4) = log((1-0.15)^t)


log(0.4) = t*log(1-0.15)


log(0.4) = t*log(0.85)


log(0.4)/log(0.85) = t


t = log(0.4)/log(0.85)


t = 5.63805542348653 <--- Use a calculator here


t = 6 ... round to the nearest whole number

Answer 13

wow thank you. I did not realize that you write 4000 as .4 etc. I really appreciate it.

Answer 14

no you write 4000/10000 as 0.4

Answer 15

not 4000 as 0.4

Answer 16

well.. I feel very uneducated at the moment haha. thanks for putting it into simple terms for me because apparently I am way off my game today..

Answer 17

that's ok, just keep practicing and you'll do better

Answer 18

thank you I am trying to work through a few more examples to see if I got the hang of now that you put it that way

Answer 19

yw, that's a good idea