Problema Solution
Find the accumulated amount A if the principal P = $11,000 is invested at the interest rate of r = 5% per year for t = 5.5 years, compounded quarterly.
Answer provided by our tutors
P = $11,000 the principal
t = 5.5 years
r = 0.05 or 5% annual rate
m = 4 compounding periods per year
i = 0.05/4 interest rate per period
n = 5.5*4 = 22 total number of compounding periods
A = future value
A = P(1 + i)^n
A = 11000(1 + 0.05/4)^22
A = $14,457.17
click here to see the step by step calculation:
after 5.5 years the accumulated amount will be $14,457.17.