The accumulated value of an investment if the money is a. compounded semiannually; b. compounded quarterly; c. compounded monthly; d. compounded continuously is $30731.4 $ , $30785.98 $30823.14 , 30841.95
What is Interest ?
Interest is the amount received by a person as a result of investing certain amount of money for a certain period of time.
It is given that
Principal = $ 25000
Time = 3 years
Interest Rate = 7 %
The amount is given by
[tex]\rm A = P( 1+ \dfrac{r}{n}) ^{nt}[/tex]
Compounded semiannually
n = 2
Compounded Quarterly
n = 4
Compounded Monthly
n =12
Compounded Continuously
P = P₀ [tex]\rm e ^{rt}[/tex]
Therefore the accumulated value for
compounded Semiannually is
[tex]\rm A = 25000( 1+ \dfrac{7}{200}) ^{2*3}[/tex]
A = $30731.4
Compounded Quarterly
[tex]\rm A = 25000( 1+ \dfrac{7}{400}) ^{4*3}[/tex]
A = $30785.98
Compounded Monthly
[tex]\rm A = 25000( 1+ \dfrac{7}{1200}) ^{12*3}[/tex]
A = $30823.14
Compounded Continuously
[tex]\rm P = 25000 e ^{ 7 * 3 }[/tex]
P = $30841.95
Therefore the accumulated value of an investment if the money is
a. compounded semiannually; b. compounded quarterly; c. compounded monthly; d. compounded continuously is
$30731.4 $ , $30785.98 $30823.14 , 30841.95
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