- Answer: 40000 = 10000( 1 + 0.03/12)^12t
(a) - The Exact Amount in the Account After Five (5) Years is
10000(1 + 0.03/12)^12 * 5 and After Ten (10) Years is 10000(1 + 0.03/12)^12 * 10
(b) - The Approximate Amount in the Account After Five (5) Years is $11618.37 and After Ten (10) Years is $1348.29
(c) - The Equation to determine how long it would take for the account to be worth $20000 is: 20000 = 10000(1 + 0.03/12)^12t
(d) - The Equation to Determine How long it would take for the Account to be worth $40000 is 40000 = 10000( 1 + 0.03/12)^12t
MAKE A PLAN:
Use the FORMULA for COMPOUND INTEREST:
A = P(1 + r/n)^nt
Where, A = FINAL AMOUNT
Where, P = PRINCIPAL
Where, r = NOMINAL INTEREST RATE
Where, n = NUMBER of TIMES INTEREST COMPOUNDED PER YEAR
Where, t = NUMBER of YEARS
(a) - EXACT AMOUNT after FIVE (5) Years, and TEN (10) YEARS:
- (1) - AFTER FIVE (5) YEARS:
A = 10000(1 + 0.03/12)^12 * 5
- (2) - AFTER TEN (10) YEARS:
A = 10000(1 + 0.03/12)^12 * 10
- (b) - APPROXIMATE AMOUNT AFTER FIVE (5) YEARS, and TEN (10) YEARS:
- (1) - After Five (5) Years: ≈
A ≈ 11618.37
- (2) - After Ten (10) Years:
A ≈ 13486.29
- (c) - Equation for the Account to be worth 20000:
20000 = 10000(1 + 0.03/12)^12t
- (d) - Equation for the Account to be worth 40000:
40000 = 10000(1 + 0.03)^12t
(d) - The Equation to Determine How long it would take for the Account to be worth $40000 is 40000 = 10000( 1 + 0.03/12)^12t
I hope this helps you!