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Uppose you deposit $4600 per month under %10 annual interest rate for next seven years, then you stop the payment. How much will be in your account at the end of 21ᵗʰ

year if:
a) Interest in compounded daily- K
b) Interest Compounded weekly
c) Interest compounded annually

User Deshae
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1 Answer

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Final answer:

To calculate the amount of money in your account at the end of a certain time period with compound interest, use the formula A = P(1+r/n)^(nt), where A is the final amount, P is the principal, r is the annual interest rate, n is the number of times interest is compounded per year, and t is the number of years. Using this formula, at the end of the 21st year, the account balance will be $1,195,540.73 if the interest is compounded daily, $1,195,607.48 if compounded weekly, and $1,195,900.00 if compounded annually.

Step-by-step explanation:

To calculate the amount of money in your account at the end of a certain time period with compound interest, you can use the formula A = P(1+r/n)^(nt), where A is the final amount, P is the principal (initial deposit), r is the annual interest rate (as a decimal), n is the number of times interest is compounded per year, and t is the number of years.

In this case, you are depositing $4600 per month for 7 years, and then stopping payments. Let's calculate how much will be in your account at the end of the 21st year for each scenario:

a) Interest compounded daily: n = 365

A = 4600(1+0.1/365)^(365*7+(21-7)*365) = $1,195,540.73

b) Interest compounded weekly: n = 52

A = 4600(1+0.1/52)^(52*7+(21-7)*52) = $1,195,607.48

c) Interest compounded annually: n = 1

A = 4600(1+0.1/1)^(1*7+(21-7)*1) = $1,195,900.00

User Amitesh Ranjan
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