Explanation Given: A depositor opens a money market account with $6000 at 8 % compounded monthly. After 2years, $ 1500 is withdrawn from the account to buy a new computer. A year later, $ 2000 is put into the account. Formula Used: A = P ( 1 + r n ) n t Calculation: In order to find the balance at the end of 3years, it is required to compute the present value of the amount deposited in the account at different time intervals. In the first year, $ 6000 at 8% compounded monthly is deposited;the following formula is to be used to decipher the ending value: A = P ( 1 + r n ) n t Where A is the money in the account after t years, P is the deposit made in the account at rate r , paid n times per year. Using this formula for the given problem: A = $ 6000 ( 1 + 0.08 4 ) 12 ( 4 ) = $ 6000 ( 1 + 0.02 ) 48 = $ 6000 ( 1.02 ) 48 Further simplifying: A = $ 6000 ( 2.5870 ) = $ 15 , 522 In the above case, t is 6 years, P is $ 6000 , r is 8 % , and n is 12. The amount calculated is A = $ 15 , 522 . Following this transaction, there is a withdrawal of $1,500 to buy a new computer. The deduction will be as follows: Value at the end of 2 years= $ 15 , 522 − $ 1500 = $ 14 , 022 $1500 is the amount thatis withdrawn and the net effect is $ 14 , 022

MyLab Math with Pearson eText -- Access Card -- for Thinking Mathematically

7th Edition

ISBN: 9780134705095

Author: Robert F. Blitzer

Publisher: PEARSON

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Chapter 8.4, Problem 68E

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To calculate: The balance at the end of 4years when a depositor opens a money market account with $6000 at 8% compounded monthly. After 2years, $1500 is withdrawn from the account to buy a new computer. A year later, $2000 is put into the account.

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Chapter 8.4, Problem 67E

Chapter 8.4, Problem 69E

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The balance at the end of 4years when a depositor opens a money market account with $6000 at 8 % compounded monthly. After 2years, $ 1500 is withdrawn from the account to buy a new computer. A year later, $ 2000 is put into the account.

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To calculate: The balance at the end of 4years when a depositor opens a money market account with $6000 at 8% compounded monthly. After 2years, $1500 is withdrawn from the account to buy a new computer. A year later, $2000 is put into the account.

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