Explanation Given information: An investment with principal $ 10 , 000 is made for 40 years at 3 % compounded annually. Formula used: Compounding periods = Term of investments ( years ) × period per year Interest rate per period = Nominal Rate Period per year Compound amount = Table factor × Principal In table 11-1, the table factor is the intersection of the rate-per-period column and the number-of-periods row is the future value of $ 1 at compound interest. When the number of periods of an investment is greater than the number of periods provided by the compound interest table, then compute a new table factor by following below steps: Step1. For the stated interest rate per period, find the two table factors that represent half, or values as close as possible to half, of the periods required. Step2. Multiply the two table factors from step 1 to form the new factor. Step3. Round the new factor to five decimal places. Calculation: Consider the investment with principal $ 10 , 000 is made for 40 years at 3 % compounded annually and solve as shown below: Compounding periods = Term of investments ( years ) &

Contemporary Mathematics for Business & Consumers - With LMS CengageNOW

8th Edition

ISBN: 9781337125468

Author: Brechner

Publisher: Cengage

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Chapter 11.I, Problem 22RE

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To calculate: The new table factor and the compound amount when the investment of principal $10,000 is made for 40 years at 3% compounded annually.

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Chapter 11.I, Problem 21RE

Chapter 11.I, Problem 23RE

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Chapter 11 Solutions

Contemporary Mathematics for Business & Consumers - With LMS CengageNOW

Ch. 11.I - Gail Parker invested $10,000 at 6% interest...Ch. 11.I - Jenny Chao invested $20,000 at 6% interest...Ch. 11.I - Prob. 3TIE Ch. 11.I - Jill Quinn invested $7,000 in a certificate of...Ch. 11.I - Prob. 5TIE Ch. 11.I - Prob. 1RE Ch. 11.I - For the following investments, find the total...Ch. 11.I - For the following investments, find the total...Ch. 11.I - Prob. 4RE Ch. 11.I - Prob. 5RE

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The new table factor and the compound amount when the investment of principal $ 10 , 000 is made for 40 years at 3 % compounded annually.

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To calculate: The new table factor and the compound amount when the investment of principal $10,000 is made for 40 years at 3% compounded annually.

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Chapter 11 Solutions