Question

Financial Math Help

Stan makes a single deposit of $5000 into an account that earns 6% compounded quarterly. How much will Stan have at the end of 10 years?

Answer 1

$12,000

Answer 2

%6 of $5000 is $300

Answer 3

$300*4=$1200

Answer 4

$1200*10=$12000

Answer 5

well yeah that sounds right but im supposed to use an certain equation (work is required to get credit in our homework assignments) Ill just use trial and error until i come out with 12000 as my answer i guess haha

Answer 6

Sorry KoalaGurl1 - here's how it's done.
First of all we have to convert 6% compounded quarterly to an annual rate.
Annual Rate = (1+ .06/4)^4
Annual Rate =1.0613635506

Now we can go to the compound interest formula:
Total = Principal*(1 + rate)^years

Answer 7

i actually think the answer is $8163.08
equation i think im supposed to use is \[M=P(1+\frac{ R }{ N })^{(NT)}\] with
P=5000
R/N = .015
(NT) = 40

Answer 8

what you think wolf? does that look right?

Answer 9

Total = Principal*(1 + rate)^years
Total = 5,000 * (1.0613635506)^10
=9,070.0920433447
which rounds to
$9,070.09

Answer 10

awh man, so i was wrong

Answer 11

Okay nseller23 , I know this stuff.
Need any explanation?

Answer 12

oh wait, i was using wrong numbers. i did my actual homework problem, i posted a similar problem with different values lol. now this makes more sense

Answer 13

lemme check with the values i posted.

Answer 14

:(

Answer 15

alright yes wolf, i got same answer. so we did same way

Answer 16

Ive got 10 different problems for my homework assignment, i may tag your name if i cant get them as i move along.

Answer 17

sorry, I'm in 7th grade and theres not a lot I can answer on here

Answer 18

Okay then!

Answer 19

That's okay KoalaGurl1 - you tried

Answer 20

no koala i probably would have gone after the same method as you if i wasnt taking the class haha. good effort and keep that up

Answer 21

thx :)

Answer 22

It was too good to be true lol

Answer 23

haha heard that :D

Answer 24

:)

Answer 25

By the way nsellers23, here's a compound interest calculator to check your work:
http://www.1728.org/compint.htm

Answer 26

oh wow thank you! haha youre a life saver

Answer 27

thanks nseller23

Answer 28

I like your pfp btw :P @wolf1728

Answer 29

What is pfp?

Answer 30

profile picture

Answer 31

Oh wow - thanks! A lot of people tell me that! (I like wolves).

Answer 32

yeah me too

Answer 33

Thanks !

Answer 34

:) np

Answer 35

wolf i have a very similar problem but got me confused.

Stan deposits $4500 at the end of EACH quarter at 6% compounded quarterly. How much will hakeem have after 10 yrs?

Did i get the correct answer: $244,205.52

Answer 36

wait no, thats wrong.

Answer 37

maybe its right, idk. i realized i made a mistake but came up with the same answer. please check if you dont mind.

Answer 38

Okay, that is considered an annuity. (I'm working on this).

Answer 39

would it be an ordinary annuity?

Answer 40

I would think so

Answer 41

yeah thats what im thinking aswell. seeing a similar example under the ordinary annuity section.

Answer 42

btw do you need any help with anything or you just on here helping others?

Answer 43

I don't need help. (I only help 1 person at a time).

Answer 44

awesome. i like that.
If its the same problem but deposited at the beginning of each quarter, does that change anything?

Answer 45

I suppose it would change things if it were for the beginning of each quarter.
As of the moment I'm working on determining a quarterly annuity formula.
Do you have one?

Answer 46

the formula i have for an ordinary annuity is