Concept explainers
a.
To find out the total amount for the given values of the principal, rate of interest and time compounded annually.
a.
Explanation of Solution
Given Information:
The given values are-
Calculation:
It has been given the principal and time years.
The amount
For compounding per year:
For continuous compounding:
It has been given compounded annually.
For
The increase in the amount is:
The effective yield is:
For
b.
To find out the amount if compounded continuously.
b.
Explanation of Solution
It has been given compounded continuously.
For
The increase in the amount is:
The effective yield is:
For
c.
To find out amount if compounded qaurtelry.
c.
Explanation of Solution
It has been given compounded quarterly.
For
The increase in the amount is:
The effective yield is:
For
d.
To find out amount if compounded quarterly at the interest rate of
d.
Explanation of Solution
For
The increase in the amount is:
The effective yield is:
For
The savings plan which has the greatest effective yield is (d).
The savings plan which has the highest balance after 5 years is (d).
Chapter 3 Solutions
EBK PRECALCULUS W/LIMITS
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