Question

If 23200 dollars is invested at an interest rate of 8 percent per year, find the value of the investment at theend of 5 years for the following compounding methods, to the nearest cent.(a) Annual: $(b) Semiannual: $(c) Monthly: $(d) Daily: $Question Help: Video Message instructorSubmit Questionneed help

Answer 1

Given

Principal = $23200

rate = 8% = 0.08

t = 5 years

Using the formula

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

(a) Annual

n = 1

`A=23200(1+(0.08)/(1))^(1\cdot5)=\$34088.41`

(b) Semi Annual

n = 2

`A=23,200(1+(0.08)/(2))^(2\cdot5)=\$34341.67`

(c)

n = 12

`A=23200(1+(0.08)/(12))^(12\cdot5)=\$34564.42`

(d)

For Daily

n = 365

`A=23200(1+(0.08)/(365))^(365\cdot5)=\$34608.82`

In Summary,

(a) Annual: $34088.41

(b) Semiannual: $34341.67

(c) Monthly: $34564.42

(d) Daily: $34608.82