Final answer:
The calculation involves finding the future value of $7,400 after 1/4 years at a 10.5% annual interest rate, using the formula Future Value = Present Value x (1 + rate)^time.
Step-by-step explanation:
The question pertains to finding the future value of an investment using a percentage rate over a certain period. To calculate the accumulation of $7,400 over 1/4 years at an annual interest rate of 10.5%, you can use Eq. 3.2, similar to the computation of population growth. Eq. 3.2 is structured as follows for monetary growth:
- Future Value = Present Value x (1 + rate)^time
In this formula:
- Present Value = $7,400
- Rate = 10.5% (or 0.105 as a decimal)
- Time = 1/4 year
Plugging the values into the equation:
Future Value = 7400 x (1 + 0.105)^(1/4)
The solution will give you the amount of money that will be accumulated after 1/4 years, considering continuous compounding at the given rate.