Suppose that an investor deposits $14,000 in a savings account for 10 yr at 2% interest. Use the model A ( t ) = P ( 1 + r n ) n t for P dollars in principal invested at an interest rate r compounded n times per year for t years for the following compounding options. Round to the nearest dollar. a. Interest compounded annually b. Interest compounded quarterly c. Interest compounded monthly
Suppose that an investor deposits $14,000 in a savings account for 10 yr at 2% interest. Use the model A ( t ) = P ( 1 + r n ) n t for P dollars in principal invested at an interest rate r compounded n times per year for t years for the following compounding options. Round to the nearest dollar. a. Interest compounded annually b. Interest compounded quarterly c. Interest compounded monthly
Solution Summary: The author explains that compound interest is equal to, C.I. = A(t)-P, where r is rate of interest, and t is time period.
Suppose that an investor deposits $14,000 in a savings account for 10 yr at 2% interest. Use the model
A
(
t
)
=
P
(
1
+
r
n
)
n
t
for P dollars in principal invested at an interest rate r compounded n times per year for t years for the following compounding options. Round to the nearest dollar. a. Interest compounded annually b. Interest compounded quarterly c. Interest compounded monthly
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