Question
Asked Nov 8, 2019
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If $500 is invested at an interest rate of 3.5% per year, find the amount of the investment at the end of 12 years for the following compounding methods. (Round your answers to the nearest cent.)
(a) Annually
(b) Semiannually
$
(c) Quarterly
(d) Continuously
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If $500 is invested at an interest rate of 3.5% per year, find the amount of the investment at the end of 12 years for the following compounding methods. (Round your answers to the nearest cent.) (a) Annually (b) Semiannually $ (c) Quarterly (d) Continuously

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Expert Answer

Step 1

Given,

3.5
0.035
100
P S500, 3.5% =
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3.5 0.035 100 P S500, 3.5% =

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Step 2

a). t = 12 years and n=1 [because compounded annually]

Therefore

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Step 3

b). n = 2 [because compounded sem...

t
A = P 1+
n
212
0.035
= 500 1+
2
500(1.516442)
= 758.2213
758.22
Hence the value of the investment after 12 years is $758.22
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t A = P 1+ n 212 0.035 = 500 1+ 2 500(1.516442) = 758.2213 758.22 Hence the value of the investment after 12 years is $758.22

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