Question

Use the compound interest formula A=P(1+r/n)^nt to find the accumulated value of an investment of $15,000 for 6 years at an interest rate of 6% if the money is spent a) compounded semiannually b) compounded quarterly and c) compounded monthly . What is the accumulated value for a, b, and c?

Answer 1

P is your initial investment. So 15000.
r is your rate of interest, with is 6% or .06
n is how your money is compounded. If it's semi-annually, then n would be 2, since it only happens twice a year. Quarterly is 4, since it happens 4 times a year. Monthly would be 12, since it happens every month and there are twelve months in a year.
t is how much time your investment is being left alone, so 6 years in this case.

Plug everything in, and make sure to add those 3 total values to get your one big accumulated value.

Answer 2

wait so the three answers are 2,4,and 12? The computer won't take that answer. Before the answer box, there is a $, so it has to be the amount of money.

Answer 3

No, 2, 4, and 12 are your 'n' values.
Your three answers should be larger, not whole numbered values.

Answer 4

so once i have the n values, how do i figure out the amount of money?

Answer 5

@Kommander_Kitten

Answer 6

Look back at my paragraph above. Simply plug in your numbers to the equation.
P = 15000
r = .06
n = 2, 4, 12
t = 6

Answer 7

A is the amount of money after it has been compounded.

Answer 8

you got this?