Answered: Use the compound interest formulas to…

Intermediate Algebra

10th Edition

ISBN:9781285195728

Author:Jerome E. Kaufmann, Karen L. Schwitters

Publisher:Jerome E. Kaufmann, Karen L. Schwitters

Chapter11: Exponential And Logarithmic Functions

Section11.2: Applications Of Exponential Functions

Problem 26PS

See similar textbooks

Related questions

Question

Use the compound interest formulas to solve the problem given. Round answers to the nearest cent. Find the accumulated value of an investment of $20,000 for 5 years at an interest rate of 5.5% if the money is a. compounded semiannually; b. compounded quarterly; c. compounded monthly; d. compounded continuously.

Expert Solution

Step 1

The term per cent means for every hundred. A fraction whose denominator is 100 is called a percentage and the numerator of the fraction is called the rate per cent. It is denoted by the symbol '%'.

To find the fraction or decimal equivalent of 'a' %, divide a by 100.

The concept of Simple & Compound Interest is based on Percentages. When a sum of money is lent by A to B, A is called the lender (creditor), B the borrower (debtor). The sum lent is called the Principal.

The interest is the extra money paid by the borrower to the lender for the use of the for a specified time.

The time for which the money is borrowed is called the period.