Problem 6-17 Calculating Future Values [LO1] Spartan Credit Bank is offering 6.8
ID: 2817646 • Letter: P
Question
Problem 6-17 Calculating Future Values [LO1] Spartan Credit Bank is offering 6.8 percent compounded daily on its savings accounts. You deposit $5,200 today. a. How much will you have in the account in 6 years? (Use 365 days a year. Do not b. How much will you have in the account in 11 years? (Use 365 days a year. Do not c. How much will you have in the account in 18 years? (Use 365 days a year. Do not ts kipped round intermediate calculations and round your answer to 2 decimal places, e.g. 32.16.) eBook Print erences round intermediate calculations and round your answer to 2 decimal places, e.g.. 32.16.) round intermediate calculations and round your answer to 2 decimal places, e.g 32.16.) a. Account value in 6 years b. Account value in 11 years c. Account value in 18 yearsExplanation / Answer
We have
Future Value = Present Value *(1+r/c)^nc
Where
r - rate per year = 6.8%
n - no. of years = 6,11,12
c- no. of compoundingg per year=365
a.
Future Value =5200 *(1+.068/365)^(6*365)
= 5200 * 1.50375
= 7819.50
b.
Future Value =5200 *(1+.068/365)^(11*365)
= 5200 * 2.112623
= 10985.64
c.
Future Value =5200 *(1+.068/365)^(18*365)
= 5200 * 3.400375
= 17681.95