Question

Please help me!

Complete the table below giving the amount P that must be invested at interest rate 7 % compounded weekly to obtain a balance of A = $40000 in t years.
t=1;10;20;30;40;50

i got the correct values for t=1;10; and 20 but for some reason using the exact same formula i get the wrong answers for the rest.

The formula i used was A=Pe^rt

Answer 1

No. You use A=Pe^rt when the interest is compounded continuously.

Here it is compounded weekly and so you have to use a different formula.

Answer 2

Here is the compound interest formula: \[\Large A = P(1 + \frac{ r }{ n })^{nt}\]A = Amount at maturity
P = Principal Amount
r = Annual interest rate in decimal
n = compounding period (compounded how many times a year)
t = years invested

Answer 3

ohhh.. then it is just a coincidence that it worked for the ones i got right?

Answer 4

yes!

Answer 5

Here it is compounded weekly and therefore n = 52 because there are 52 weeks in a year.
A = 40,000 ; r = 0.07 ; t=1;10;20;30;40;50
Calculate the corresponding Ps

Answer 6

okay. Thank you so much!

Answer 7

you are welcome.