A. Suppose we had $15,192 cash and invested it in the bank at 16 percent interest, how much would you have at the end of 1, 2, 3, 4 years, assuming annual compounding?

Question

asked Feb 20, 2020 97.3k views

1 Answer

Mars · Answer 1 · 2020-02-25T05:56:06+0000

Answer:

Part a)
$\$17,622.72$

Part b)
$\$20,442.36$

Part c)
$\$23,713.13$

Part d)
$\$27,507.23$

Explanation:

we know that

The compound interest formula is equal to

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

where

A is the Final Investment Value

P is the Principal amount of money to be invested

r is the rate of interest in decimal

t is Number of Time Periods

n is the number of times interest is compounded per year

Part a) How much would you have at the end of 1 year?

in this problem we have

$t=1\ years\\ P=\$15,192\\ r=0.16\\n=1$

substitute in the formula above

$A=15,192(1+(0.16)/(1))^(1*1)=\$17,622.72$

Part b) How much would you have at the end of 2 year?

in this problem we have

$t=2\ years\\ P=\$15,192\\ r=0.16\\n=1$

substitute in the formula above

$A=15,192(1+(0.16)/(1))^(1*2)=\$20,442.36$

Part c) How much would you have at the end of 3 year?

in this problem we have

$t=3\ years\\ P=\$15,192\\ r=0.16\\n=1$

substitute in the formula above

$A=15,192(1+(0.16)/(1))^(1*3)=\$23,713.13$

Part d) How much would you have at the end of 4 year?

in this problem we have

$t=4\ years\\ P=\$15,192\\ r=0.16\\n=1$

substitute in the formula above

$A=15,192(1+(0.16)/(1))^(1*4)=\$27,507.23$