Question

Bobbi saved $1,000 from her summer job, she puts it into an account with a 6.9% interest compounded annually. How much will she have in her account after five years?

Answer 1

do you know the compound interest formula...?

Answer 2

is it f(t)=a(1+b)^t?

Answer 3

ok... so a = $1000 b = 6.9% as a decimal t = 5 years...

just substitute and calculate... and make sure you have b as a decimal when substituting

Answer 4

Is the answer about $1396?

Answer 5

1396 is \(\large \color{red}{\checkmark}\)

http://www.wolframalpha.com/input/?i=1000%281+%2B+0.069%29%5E5

Answer 6

good job !

Answer 7

Here's a good site for calculating compound interest:
http://1728.org/compint.htm

Answer 8

Thank you! Oh and since you are here can you help me out with similar ones that go along with this question?
2. What if the interest was 6.87% compounded quarterly (4 times a year)

Answer 9

use below formula :

\(\large A = P(1 + \frac{r}{n})^{n\times t}\)

Answer 10

it says math processing error...

Answer 11

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

Answer 12

n = 4 here

Answer 13

try mine - it even has quarterly compounding

Answer 14

http://www.wolframalpha.com/input/?i=1000%281+%2B+0.069%2F4%29%5E%285*4%29

Answer 15

Ok thank you. So now what if the interest was 6.85% compounded monthly?

Answer 16

how many months are there in a year ?

Answer 17

12

Answer 18

so, n = 12

Answer 19

plugit in the formula :

A = P(1 + r/n)^(nt)
= 1000( 1 + 0.0685/12)^(12*5)

Answer 20

wat do u get ?

Answer 21

I got $1410

Answer 22

oh wait hold on

Answer 23

use wolfram as ur calculator :
http://www.wolframalpha.com/input/?i=1000%281+%2B+0.0685%2F12%29%5E%285*12%29

Answer 24

ok i got $27961

Answer 25

ugh I put the percent in wrong

Answer 26

try again,
u should get 1407.09

Answer 27

1000 dollars wont become 27961 dollars in just 5 years !!! xD

Answer 28

yup got it!! Thank you so much. Okay I only have 2 more. What about 6.8$ interest compounded daily (365 times a year--leap year not included)

Answer 29

plugin n = 365

Answer 30

*6.8%

Answer 31

use same formula

Answer 32

ok i got $1404

Answer 33

I got 1,404.90

Answer 34

http://www.wolframalpha.com/input/?i=1000%281+%2B+0.068%2F365%29%5E%285*365%29

Answer 35

always trust wolfram :)

Answer 36

1404.9 ~ 1405

Answer 37

Yay okay! One more!! What if the interest was 6.7% compounded continuously?

Answer 38

now the fun part :)

Answer 39

\(e\) kicks in

Answer 40

it says math processing error

Answer 41

"e" kicks in

Answer 42

ohhh okay. So what do I put in wolfram lol

Answer 43

whenever u see "continuous", it got to do with "e"

Answer 44

A = P*e^(r*t)

Answer 45

P = initial investment
r = interest rate
t = # of years

Answer 46

plugin

Answer 47

i got 3.53887... *10^17

Answer 48

????

Answer 49

wolfram says 1397.94
http://www.wolframalpha.com/input/?i=1000%28e%29%5E%280.067*5%29

Answer 50

yup thats what it said.. YAY Thank you so much!!!!!

Answer 51

np.. u wlc :)