Porsha calculates the amount of money she will have at the end of 6 years on a $5,000 investment earning 3.75% interest compounded quarterly. She writes the following expression: Which of the following statements about Porsha's expression is true? a. Porsha's expression is correct. b. Porsha's expression should have 1 + 0.009375 in the parentheses. c. Porsha's expression should have an exponent of 6, not 24. d. Porsha's expression should have both 1 + 0.009375 in the parentheses and an exponent of 6.

Question

Brent Andrews

Mathematics

16 December, 11:30

Porsha calculates the amount of money she will have at the end of 6 years on a $5,000 investment earning 3.75% interest compounded quarterly. She writes the following expression: Which of the following statements about Porsha's expression is true? a. Porsha's expression is correct. b. Porsha's expression should have 1 + 0.009375 in the parentheses. c. Porsha's expression should have an exponent of 6, not 24. d. Porsha's expression should have both 1 + 0.009375 in the parentheses and an exponent of 6.

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Answers (1)

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Winston Bauer · Answer 1

Porsha' s expression:

5,000 (1 + 0.0375) ^24

A = P * (1 + i) ^n

n = 6 * 4 = 24

i = 0.0375 : 4 = 0.009375

Porsha's expression is wrong. True expression is:

5,000 * (1 + 0.009375) ^24

Answer: B) Porsha's expression should have 1 + 0.009375 in the parentheses.