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23 October, 04:59

At the time of her grandson's birth, a grandmother deposited $6, 000 in an account. The account was paying 4.5 % interest compounded monthly.

a. If the rate did not change, what was the value of the account after 17 years?

b. If the money had been invested at 4.5 % compounded quarterly, what would the value of the account have been after 17 years?

a. The value of the account will be $

b. The value after 17 years $

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  1. 23 October, 05:14
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    Put the given numbers in the appropriate formula and evaluate.

    A = P (1 + r/n) ^ (nt)

    P is the principal amount

    r is the annual rate

    n is the number of times per year interest is compounded

    t is the number of years

    A is the balance in the account after t years

    a. A = $6000 * (1 +.045/12) ^ (12*17) ≈ $12,875.53

    b. A = $6000 * (1 +.045/4) ^ (4*17) = $12,839.01
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