At the time of a child’s birth, $10,000 was deposited in an account paying 3% interest compounded quarterly. What will be the value of the account at the child’s twenty-first birthday? (b)Parents wish to have $80,000 available for a child’s education. If the child is now 5 years old, how much money must be put into an account with an APR of 6%, compounded semi-annually to meet their financial goal when the child is 18? (c) According to Investopedia, even with very large investment amounts, the difference in the total interest earned through continuous compounding is not very high when compared to traditional compounding periods. We are going to test this theory. Suppose $15,000 is invested in an account with an annual interest rate of 3.78%, compare the account balance after one year when interest is compounded quarterly, daily, and continuously. Please help I am so confused.
At the time of a child’s birth, $10,000 was deposited in an account paying 3% interest compounded quarterly. What will be the value of the account at the child’s twenty-first birthday?
(b)Parents wish to have $80,000 available for a child’s education. If the child is now 5 years old, how much money must be put into an account with an APR of 6%, compounded semi-annually to meet their financial goal when the child is 18?
(c) According to Investopedia, even with very large investment amounts, the difference in the total interest earned through continuous compounding is not very high when compared to traditional compounding periods. We are going to test this theory. Suppose $15,000 is invested in an account with an annual interest rate of 3.78%, compare the account balance after one year when interest is compounded quarterly, daily, and continuously.
Please help I am so confused.
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