Question

Question 2niUse the compound interest formulas A = P(1+P(1+)and A Per to solve. Find the accumulatedvalue of an investment of $5000 at 10% compounded quarterly for 5 years

Answer 1

On simplifIt is given that,

`\begin{gathered} P\text{ = \$ 5000} \\ r\text{ = 10\%} \\ t\text{ = 5 years} \end{gathered}`

The formula for amount is given as,

`A\text{ = P\lparen1+}(R)/(n))^(nt)`

Amount is calculated as,

`A\text{ = 5000}*\text{ \lparen1+}(0.1)/(4))^(20)`

On simplifying further,

`\begin{gathered} A\text{ = 5000 }*\text{ \lparen1.025\rparen}^(20) \\ A\text{ = 5000 }*\text{ 1.6386} \\ A\text{ = 8193} \end{gathered}`

Thus the amount is $ 8193.