At the time of her grandson's birth, a grandmother deposited $6, 000 in an account. The account was paying 4.5 % interest compounded monthly.

a. If the rate did not change, what was the value of the account after 17 years?

b. If the money had been invested at 4.5 % compounded quarterly, what would the value of the account have been after 17 years?

a. The value of the account will be $

b. The value after 17 years $

Question

Mathematics

Emilee

6 January, 17:42

At the time of her grandson's birth, a grandmother deposited $6, 000 in an account. The account was paying 4.5 % interest compounded monthly.

a. If the rate did not change, what was the value of the account after 17 years?

b. If the money had been invested at 4.5 % compounded quarterly, what would the value of the account have been after 17 years?

a. The value of the account will be $

b. The value after 17 years $

+1

Answers (1)

Know the Answer?

Mariela Carney · Answer 1

Put the given numbers in the appropriate formula and evaluate.

A = P (1 + r/n) ^ (nt)

P is the principal amount

r is the annual rate

n is the number of times per year interest is compounded

t is the number of years

A is the balance in the account after t years

a. A = $6000 * (1 +.045/12) ^ (12*17) ≈ $12,875.53

b. A = $6000 * (1 +.045/4) ^ (4*17) = $12,839.01