Suppose that $1,000 is deposited in a savings account at an annual rate of 5 % . Guess the amount in the account at the end of 1 year if interest is compounded 1 quarterly, 2 monthly, 3 daily, 4 hourly. Use the compound interest formula to compute the amounts at the end of 1 year to the nearest cent. Discuss the accuracy of your initial guesses.
Suppose that $1,000 is deposited in a savings account at an annual rate of 5 % . Guess the amount in the account at the end of 1 year if interest is compounded 1 quarterly, 2 monthly, 3 daily, 4 hourly. Use the compound interest formula to compute the amounts at the end of 1 year to the nearest cent. Discuss the accuracy of your initial guesses.
Solution Summary: The author calculates the amount at the end of first year by guessing and then using the compound interest formula if interest is compounded 1000.
Suppose that
$1,000
is deposited in a savings account at an annual rate of
5
%
. Guess the amount in the account at the end of
1
year if interest is compounded
1
quarterly,
2
monthly,
3
daily,
4
hourly. Use the compound interest formula to compute the amounts at the end of
1
year to the nearest cent. Discuss the accuracy of your initial guesses.
Finite Mathematics & Its Applications (12th Edition)
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, subject and related others by exploring similar questions and additional content below.
Compound Interest Formula Explained, Investment, Monthly & Continuously, Word Problems, Algebra; Author: The Organic Chemistry Tutor;https://www.youtube.com/watch?v=P182Abv3fOk;License: Standard YouTube License, CC-BY
Applications of Algebra (Digit, Age, Work, Clock, Mixture and Rate Problems); Author: EngineerProf PH;https://www.youtube.com/watch?v=Y8aJ_wYCS2g;License: Standard YouTube License, CC-BY