Problema Solution
Identify the given values of A, P, r, n and t. Identify which variable is missing and would need to be solved for. Do not solve. (For the missing variable, enter the letter of the variable.)
An investment of $200,000 is put in an account paying 5.5% annual interest compounded weekly. Find the balance of the account after 5 years.
Answer provided by our tutors
P = $200,000 is the principal
r = 0.055 (or 5.5%) is the annual interest as a decimal
t = 5 years is the time
n = 52*5 = 260 compounding periods (since there are 52 weeks per year)
A = the future value
A = P*(1 + r/52)^n
If we plug all the values for P, r, t and n we will find the balance of the account after5 years:
A = 200000*(1 + 0.055/52)^260
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A = $263,267.87
The balance of the account after 5 years will be $263,267.87.