Explanation Given information: An investment with compound amount $ 9 , 800 made for 4 years at 12 % interest compounded quarterly. Formula used: Compounding period can be calculated by formula given below: Compounding periods = Term of investments ( years ) × m Here, m is the period per year. The interest rate per period can be calculated by dividing the annual, or nominal, rate by the number of periods per year, Interest rate per period = Nominal rate Period per year The present value (principal) can be calculated by the formula given below: Principal = Table factor × Compound amount In Present value table 11-2, the table factor is the intersection of the rate-per-period column and the number-of-periods row is the present value of $ 1 at compound interest. The compound interest can be calculated by the formula given below: Compound interest = Compound amount − Principal Calculation: Consider the compound amount $ 9 , 800 made for 4 years at 12 % interest compounded quarterly and solve as shown below: Since, the variables-compound amount, time period (years), nominal rate and interest compounded are given; therefore, the compounding period can be calculated as below: Compounding periods ( n ) = Term of investments ( years ) × m

Contemporary Mathematics For Business & Consumers, Brief Edition, Loose-leaf Version

8th Edition

ISBN: 9781305867192

Author: Robert Brechner, Geroge Bergeman

Publisher: South-Western College Pub

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Chapter 11.II, Problem 7RE

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To calculate: The present value (principal) and the compound interest for an investment with compound amount $9,800 made for 4 years at 12% interest compounded quarterly using the table 11-2. Also, round your answer to the nearest cent.

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Chapter 11.II, Problem 6RE

Chapter 11.II, Problem 8RE

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Chapter 11 Solutions

Contemporary Mathematics For Business & Consumers, Brief Edition, Loose-leaf Version

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 present value (principal) and the compound interest for an investment with compound amount $ 9 , 800 made for 4 years at 12 % interest compounded quarterly using the table 11-2. Also, round your answer to the nearest cent.

Solution Summary: The author calculates the present value (principal) and the compound interest for an investment with compound amount 9,800 made for 4 years at 12% interest compounded quarterly using the table 1

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To calculate: The present value (principal) and the compound interest for an investment with compound amount $9,800 made for 4 years at 12% interest compounded quarterly using the table 11-2. Also, round your answer to the nearest cent.

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Chapter 11 Solutions