Question

Anyone?

Landon opened a savings account with a deposit of $3,786.45. Nine years later, the balance in the account is $5,135.29. If the interest rate is 3.4%, how often does the interest compound?

daily

monthly

quarterly

annually

Answer 1

Hint:

use the formula

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

Answer 2

In this case

P = 3786.45
r = 0.034
t = 9

Answer 3

Plug these values into the formula A = P(1+r/n)^(n*t) to get


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

A = 3786.45(1+0.034/n)^(n*9)

Answer 4

The goal is to find the value of n which makes A equal to 5135.29

Answer 5

Common of values of n are
n = 1 (annual compounding)
n = 2 (semi-annual compounding)
n = 4 (quarterly compounding)
n = 12 (monthly compounding)
n = 365 (daily compounding)

Answer 6

So plug in each value of n listed above into

A = 3786.45(1+0.034/n)^(n*9)

-------------------------------------------------------

So for instance, if n = 1, then

A = 3786.45(1+0.034/n)^(n*9)

A = 3786.45(1+0.034/1)^(1*9)

A = 5115.84143581059

A = 5115.84

which is NOT the value of 5135.29, so we must move onto other values of n and check them

Answer 7

This rules out annual compounding as a possible answer choice

Answer 8

does all this make sense?

Answer 9

yes,its not C or D. I'm stuck between choosing A or B :/

Answer 10

You can use my formula and change the n into the corresponding number and take a look at the answer if its the same as the given which is $5,135.29

Answer 11

also, I answered your other question

Answer 12

monthly right?

Answer 13

Yep :D

Answer 14

yayyy and whats the answer to the taylor one? its my last one, please just fill me in lol

Answer 15

? @GirlByte

Answer 16

pleeasse

Answer 17

I'm back lol. Just follow the solution

Answer 18

I've been doing questions all night, this is my last one could you do me this one tiny favor?

Answer 19

Sure

Answer 20

its 58

Answer 21

thank you so much, have a nice evening :)

Answer 22

yw :)