An initial investment of $480 is appreciated for 4 years earns 12% interest, com
ID: 2883716 • Letter: A
Question
An initial investment of $480 is appreciated for 4 years earns 12% interest, compounded quarterly. Find the amount of money in the account at the end of the period. A) $747.82 B) $755.29 C) $770.26 D) $290.26 If you are to receive 4877.76 in 19 years from an account that ears 6% interest compounded continuously, what is the present value of the money? A) $1840.00 B) $1560.00 C) $2040.00 D) $1838.45 An initial investment of $1600 is appreciated for 14 years in an account that earns 9% interest, compounded continuously. Find the amount of money in the account at the end of the period. A) $3043.05 B) $5640.67 C) $7580.35 D) $58, 104, 804.18 If you are to receive $ 1215.51 in 2 years from an account that earns 10% compounded semiannually, what is the present value of the money? A) $975.23 B) $950.00 C) $1000.00 D) $1100.00Explanation / Answer
1) We have given P=$480,t=4years,r=12%=0.12
To find amount we use formula is
A=P(1+r/n)nt where n is number of times compounded per year,t is time in years,A is amount,P is principal amount
A=480(1+(0.12/4))4*4
A=480(1+(0.12/4))16
A=$770.26
answer is C) $770.26
2) We have given FV=4877.76,t=19 years,r=6%=0.06
We know the formula is
PV=FV/ert where FV is future value, PV is present value
PV=4877.76/e^(0.06*19)
PV=$1560.00
answer is B) $1560.00
3) We have given P=$1600,t=14 years,r=9%=0.09
We have the formula is A=Pert
A=Pert
A=1600*e^(0.09*14)=$5640.67
A=$5640.67
answer is B) $5640.67
4) We have given FV=1215.51,t=2years,r=10%=0.10,n=2 periods for semiannually
To find present value we use formula is
FV=PV(1+r/n)nt where n is number of periods ,FV is Future value,PV is Present value
1215.51=PV(1+(0.10/2))^4
PV=1215.51/(1+(0.10/2))^4 =$1000.00
answer is C) $1000.00