For Exercises 11–16, suppose that P dollars in principal is invested at an annual interest rate r. For interest compounded n times per year, the amount
Suppose an investor deposits $15,000 in an account for 8 yr at 5.0% interest. Find the total amount of money in the account for the following compounding options. Compare your answers. How does the number of compound periods per year affect the total investment?
a. Compounded annually
b. Compounded quarterly
c. Compounded monthly
d. Compounded daily
e. Compounded continuously
Want to see the full answer?
Check out a sample textbook solutionChapter 12 Solutions
ALEKS CORPORATION ALEKS 360 IA BEG & INT
- An investment account was opened with aninitial deposit of 9,600 and earns 7.4 interest,compounded continuously. How much will theaccount be worth after 15 years?arrow_forwardSuppose an investment account is opened with aninitial deposit of 10,500 earning 6.25 interest,compounded continuously. How much will theaccount be warm after 25 years?arrow_forward3. Find the formula for the exponential function passing through the points (0,1.5) and (1,5).arrow_forward
- At the beginning of the last decade, a total of 7.2 million passengers took a cruise vacation. The global cruising industry has been growing at approximately 7% per year. Assume that this growth rate continues. Suppose N = (t) gives the number of passengers, in millions, that take a cruise vacation at year t. Answer parts (a), (b), (c), and (d) of the question. Click VERIFY to move to the next part. (a) Report the following. Use the pull-down menu to indicate the units. A0) = Number Click for List (b) If (t) is written in the form a-b’, do you predict the value of b to be greater than 1 or less than 1? O b is greater than 1 O b is less than 1 (c) Complete the boxes below to write a formula which gives N as a function of t, where t is in years. Do not round any values. Since your formula gives N in millions of people, check that it passes through the initial value x = 0, N= 7.2, as opposed to passing through x = 0, y = 7,200,000. N= Number ( Number (d) How many millions of cruise…arrow_forwardWhen a particular amount of money P, called the principal, is invested at the interest rate r and is compounded n times a year, the amount A accumulated after t years is nt A(t) = P(1+ )" n Determine the amount of money accumulated after 15 years if $1, 000 is invested in an account that pays 10 % interest compounded monthly. Round to the nearest cent.arrow_forwardA young person with no initial capital invests k dollars per year at an annual rate of return r. Assume that investments are made continuously and that the return is compounded continuously. b.If r = 7.5%, determine k so that $1 million will be available for retirement in 40 years.arrow_forward
- 2. Find the exponential function that passes through (0,6) and (3,750).arrow_forwardAt a certain rate of compound interest, 1 will increase to 2 in a years, 2 will increase to 3 in b years, and 3 will increase to 15 in c years. If 6 will increase to 10 in n years, express n as a function of a, b, and c .arrow_forwardYou have a formula that gives return R, in dollars, that the operator must pay off after t months. The formula is R(t)=21,000x1.06^t. Assume the investors pay $2000 to join the scheme. How many investors must be recruited at the end of 3 years in order to pay the existing investors?arrow_forward
- Algebra & Trigonometry with Analytic GeometryAlgebraISBN:9781133382119Author:SwokowskiPublisher:CengageAlgebra and Trigonometry (MindTap Course List)AlgebraISBN:9781305071742Author:James Stewart, Lothar Redlin, Saleem WatsonPublisher:Cengage Learning