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    volora Posts: 22, Reputation: 1
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    #1

    Mar 15, 2009, 11:15 AM
    Compounding quarterly, compounded continuously and compounded annually
    I'm trying to figure out how to do these problems and I can't get the right answers. I would really appreciate any help.

    1. Assume that I deposit $1250 today into an account that pays 10% p.a. but with quarterly compounding. How much will be in my account exactly 35 years from today?

    2. Assume that the stated nominal interest rate is 7.5% compounded continuously. What is the effective
    Rate?

    3. Kerri deposits $8,000 in a bank account today. She makes another deposit of $14,000 into the account at the end of year one and she makes a third deposit of $10,000 at the end of year twoNo additional deposits are made. If the bank pays interest at 8 percent compounded annually, how much will she have in her account at the end of eight years?
    ROLCAM's Avatar
    ROLCAM Posts: 1,420, Reputation: 23
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    #2

    Mar 16, 2009, 02:22 AM

    Assume that I deposit $1250 today into an account that pays 10% p.a. but with quarterly compounding. How much will be in my account exactly 35 years from today?

    FIRST PART.
    10% compounded quarterly .


    1.000000 1.025000
    1.025000 1.050625
    1.050625 1.076891
    1.076891 1.103813

    New Rate = 10.3813%
    ##############################

    SECOND PART .

    1 1,250.00 1,379.77
    2 1,379.77 1,523.01
    3 1,523.01 1,681.12
    4 1,681.12 1,855.64
    5 1,855.64 2,048.28
    6 2,048.28 2,260.92
    7 2,260.92 2,495.63
    8 2,495.63 2,754.71
    9 2,754.71 3,040.69
    10 3,040.69 3,356.35
    11 3,356.35 3,704.78
    12 3,704.78 4,089.39
    13 4,089.39 4,513.92
    14 4,513.92 4,982.52
    15 4,982.52 5,499.77
    16 5,499.77 6,070.72
    17 6,070.72 6,700.94
    18 6,700.94 7,396.59
    19 7,396.59 8,164.45
    20 8,164.45 9,012.02
    21 9,012.02 9,947.59
    22 9,947.59 10,980.28
    23 10,980.28 12,120.17
    24 12,120.17 13,378.40
    25 13,378.40 14,767.26
    26 14,767.26 16,300.29
    27 16,300.29 17,992.47
    28 17,992.47 19,860.32
    29 19,860.32 21,922.08
    30 21,922.08 24,197.88
    31 24,197.88 26,709.94
    32 26,709.94 29,482.77
    33 29,482.77 32,543.47
    34 32,543.47 35,921.90
    35 35,921.90 39,651.07

    Please acknowledge understanding.
    ROLCAM's Avatar
    ROLCAM Posts: 1,420, Reputation: 23
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    #3

    Mar 16, 2009, 02:50 AM
    2. Assume that the stated nominal interest rate is 7.5% compounded continuously. What is the effective
    rate?

    The effective rate is = 7.7876062%

    See Calculation:-

    1 1.0000000000 1.0002054800
    2 1.0002054800 1.0004110022
    3 1.0004110022 1.0006165667
    4 1.0006165667 1.0008221734
    5 1.0008221734 1.0010278223
    6 1.0010278223 1.0012335135
    7 1.0012335135 1.0014392470
    8 1.0014392470 1.0016450227
    9 1.0016450227 1.0018508407
    10 1.0018508407 1.0020567010
    11 1.0020567010 1.0022626036
    12 1.0022626036 1.0024685486
    13 1.0024685486 1.0026745358
    14 1.0026745358 1.0028805654
    15 1.0028805654 1.0030866373
    16 1.0030866373 1.0032927515
    17 1.0032927515 1.0034989081
    18 1.0034989081 1.0037051071
    19 1.0037051071 1.0039113484
    20 1.0039113484 1.0041176321
    21 1.0041176321 1.0043239582
    22 1.0043239582 1.0045303267
    23 1.0045303267 1.0047367376
    24 1.0047367376 1.0049431909
    25 1.0049431909 1.0051496866
    26 1.0051496866 1.0053562247
    27 1.0053562247 1.0055628053
    28 1.0055628053 1.0057694284
    29 1.0057694284 1.0059760939
    30 1.0059760939 1.0061828019
    31 1.0061828019 1.0063895523
    32 1.0063895523 1.0065963452
    33 1.0065963452 1.0068031806
    34 1.0068031806 1.0070100586
    35 1.0070100586 1.0072169790
    36 1.0072169790 1.0074239419
    37 1.0074239419 1.0076309474
    38 1.0076309474 1.0078379954
    39 1.0078379954 1.0080450860
    40 1.0080450860 1.0082522191
    41 1.0082522191 1.0084593947
    42 1.0084593947 1.0086666130
    43 1.0086666130 1.0088738738
    44 1.0088738738 1.0090811772
    45 1.0090811772 1.0092885232
    46 1.0092885232 1.0094959118
    47 1.0094959118 1.0097033430
    48 1.0097033430 1.0099108169
    49 1.0099108169 1.0101183333
    50 1.0101183333 1.0103258924
    51 1.0103258924 1.0105334942
    52 1.0105334942 1.0107411386
    53 1.0107411386 1.0109488257
    54 1.0109488257 1.0111565555
    55 1.0111565555 1.0113643279
    56 1.0113643279 1.0115721431
    57 1.0115721431 1.0117800009
    58 1.0117800009 1.0119879015
    59 1.0119879015 1.0121958447
    60 1.0121958447 1.0124038308
    61 1.0124038308 1.0126118595
    62 1.0126118595 1.0128199310
    63 1.0128199310 1.0130280452
    64 1.0130280452 1.0132362022
    65 1.0132362022 1.0134444020
    66 1.0134444020 1.0136526445
    67 1.0136526445 1.0138609299
    68 1.0138609299 1.0140692580
    69 1.0140692580 1.0142776290
    70 1.0142776290 1.0144860428
    71 1.0144860428 1.0146944993
    72 1.0146944993 1.0149029988
    73 1.0149029988 1.0151115410
    74 1.0151115410 1.0153201262
    75 1.0153201262 1.0155287541
    76 1.0155287541 1.0157374250
    77 1.0157374250 1.0159461387
    78 1.0159461387 1.0161548953
    79 1.0161548953 1.0163636948
    80 1.0163636948 1.0165725372
    81 1.0165725372 1.0167814226
    82 1.0167814226 1.0169903508
    83 1.0169903508 1.0171993220
    84 1.0171993220 1.0174083361
    85 1.0174083361 1.0176173932
    86 1.0176173932 1.0178264932
    87 1.0178264932 1.0180356362
    88 1.0180356362 1.0182448221
    89 1.0182448221 1.0184540511
    90 1.0184540511 1.0186633230
    91 1.0186633230 1.0188726380
    92 1.0188726380 1.0190819959
    93 1.0190819959 1.0192913969
    94 1.0192913969 1.0195008409
    95 1.0195008409 1.0197103279
    96 1.0197103279 1.0199198580
    97 1.0199198580 1.0201294311
    98 1.0201294311 1.0203390473
    99 1.0203390473 1.0205487066
    100 1.0205487066 1.0207584089
    101 1.0207584089 1.0209681544
    102 1.0209681544 1.0211779429
    103 1.0211779429 1.0213877746
    104 1.0213877746 1.0215976493
    105 1.0215976493 1.0218075672
    106 1.0218075672 1.0220175282
    107 1.0220175282 1.0222275324
    108 1.0222275324 1.0224375797
    109 1.0224375797 1.0226476702
    110 1.0226476702 1.0228578038
    111 1.0228578038 1.0230679806
    112 1.0230679806 1.0232782006
    113 1.0232782006 1.0234884639
    114 1.0234884639 1.0236987703
    115 1.0236987703 1.0239091199
    116 1.0239091199 1.0241195127
    117 1.0241195127 1.0243299488
    118 1.0243299488 1.0245404281
    119 1.0245404281 1.0247509507
    120 1.0247509507 1.0249615165
    121 1.0249615165 1.0251721256
    122 1.0251721256 1.0253827780
    123 1.0253827780 1.0255934736
    124 1.0255934736 1.0258042126
    125 1.0258042126 1.0260149948
    126 1.0260149948 1.0262258204
    127 1.0262258204 1.0264366893
    128 1.0264366893 1.0266476015
    129 1.0266476015 1.0268585570
    130 1.0268585570 1.0270695559
    131 1.0270695559 1.0272805982
    132 1.0272805982 1.0274916838
    133 1.0274916838 1.0277028128
    134 1.0277028128 1.0279139852
    135 1.0279139852 1.0281252009
    136 1.0281252009 1.0283364601
    137 1.0283364601 1.0285477627
    138 1.0285477627 1.0287591087
    139 1.0287591087 1.0289704981
    140 1.0289704981 1.0291819309
    141 1.0291819309 1.0293934072
    142 1.0293934072 1.0296049270
    143 1.0296049270 1.0298164902
    144 1.0298164902 1.0300280969
    145 1.0300280969 1.0302397471
    146 1.0302397471 1.0304514408
    147 1.0304514408 1.0306631779
    148 1.0306631779 1.0308749586
    149 1.0308749586 1.0310867828
    150 1.0310867828 1.0312986505
    151 1.0312986505 1.0315105617
    152 1.0315105617 1.0317225165
    153 1.0317225165 1.0319345149
    154 1.0319345149 1.0321465568
    155 1.0321465568 1.0323586422
    156 1.0323586422 1.0325707713
    157 1.0325707713 1.0327829439
    158 1.0327829439 1.0329951602
    159 1.0329951602 1.0332074200
    160 1.0332074200 1.0334197235
    161 1.0334197235 1.0336320706
    162 1.0336320706 1.0338444613
    163 1.0338444613 1.0340568956
    164 1.0340568956 1.0342693737
    165 1.0342693737 1.0344818953
    166 1.0344818953 1.0346944607
    167 1.0346944607 1.0349070697
    168 1.0349070697 1.0351197224
    169 1.0351197224 1.0353324188
    170 1.0353324188 1.0355451589
    171 1.0355451589 1.0357579427
    172 1.0357579427 1.0359707703
    173 1.0359707703 1.0361836415
    174 1.0361836415 1.0363965565
    175 1.0363965565 1.0366095153
    176 1.0366095153 1.0368225178
    177 1.0368225178 1.0370355641
    178 1.0370355641 1.0372486542
    179 1.0372486542 1.0374617880
    180 1.0374617880 1.0376749657
    181 1.0376749657 1.0378881871
    182 1.0378881871 1.0381014524
    183 1.0381014524 1.0383147615
    184 1.0383147615 1.0385281144
    185 1.0385281144 1.0387415112
    186 1.0387415112 1.0389549518
    187 1.0389549518 1.0391684362
    188 1.0391684362 1.0393819646
    189 1.0393819646 1.0395955368
    190 1.0395955368 1.0398091529
    191 1.0398091529 1.0400228129
    192 1.0400228129 1.0402365167
    193 1.0402365167 1.0404502645
    194 1.0404502645 1.0406640563
    195 1.0406640563 1.0408778919
    196 1.0408778919 1.0410917715
    197 1.0410917715 1.0413056950
    198 1.0413056950 1.0415196625
    199 1.0415196625 1.0417336740
    200 1.0417336740 1.0419477294
    201 1.0419477294 1.0421618288
    202 1.0421618288 1.0423759723
    203 1.0423759723 1.0425901597
    204 1.0425901597 1.0428043911
    205 1.0428043911 1.0430186665
    206 1.0430186665 1.0432329860
    207 1.0432329860 1.0434473495
    208 1.0434473495 1.0436617571
    209 1.0436617571 1.0438762087
    210 1.0438762087 1.0440907044
    211 1.0440907044 1.0443052442
    212 1.0443052442 1.0445198280
    213 1.0445198280 1.0447344559
    214 1.0447344559 1.0449491280
    215 1.0449491280 1.0451638441
    216 1.0451638441 1.0453786044
    217 1.0453786044 1.0455934088
    218 1.0455934088 1.0458082573
    219 1.0458082573 1.0460231500
    220 1.0460231500 1.0462380868
    221 1.0462380868 1.0464530678
    222 1.0464530678 1.0466680930
    223 1.0466680930 1.0468831624
    224 1.0468831624 1.0470982759
    225 1.0470982759 1.0473134337
    226 1.0473134337 1.0475286356
    227 1.0475286356 1.0477438818
    228 1.0477438818 1.0479591722
    229 1.0479591722 1.0481745069
    230 1.0481745069 1.0483898858
    231 1.0483898858 1.0486053089
    232 1.0486053089 1.0488207764
    233 1.0488207764 1.0490362880
    234 1.0490362880 1.0492518440
    235 1.0492518440 1.0494674443
    236 1.0494674443 1.0496830889
    237 1.0496830889 1.0498987777
    238 1.0498987777 1.0501145109
    239 1.0501145109 1.0503302885
    240 1.0503302885 1.0505461103
    241 1.0505461103 1.0507619766
    242 1.0507619766 1.0509778871
    243 1.0509778871 1.0511938421
    244 1.0511938421 1.0514098414
    245 1.0514098414 1.0516258851
    246 1.0516258851 1.0518419732
    247 1.0518419732 1.0520581056
    248 1.0520581056 1.0522742825
    249 1.0522742825 1.0524905039
    250 1.0524905039 1.0527067696
    251 1.0527067696 1.0529230798
    252 1.0529230798 1.0531394344
    253 1.0531394344 1.0533558335
    254 1.0533558335 1.0535722771
    255 1.0535722771 1.0537887651
    256 1.0537887651 1.0540052976
    257 1.0540052976 1.0542218746
    258 1.0542218746 1.0544384961
    259 1.0544384961 1.0546551622
    260 1.0546551622 1.0548718727
    261 1.0548718727 1.0550886278
    262 1.0550886278 1.0553054274
    263 1.0553054274 1.0555222716
    264 1.0555222716 1.0557391603
    265 1.0557391603 1.0559560936
    266 1.0559560936 1.0561730714
    267 1.0561730714 1.0563900939
    268 1.0563900939 1.0566071609
    269 1.0566071609 1.0568242725
    270 1.0568242725 1.0570414288
    271 1.0570414288 1.0572586297
    272 1.0572586297 1.0574758752
    273 1.0574758752 1.0576931653
    274 1.0576931653 1.0579105001
    275 1.0579105001 1.0581278795
    276 1.0581278795 1.0583453037
    277 1.0583453037 1.0585627725
    278 1.0585627725 1.0587802859
    279 1.0587802859 1.0589978441
    280 1.0589978441 1.0592154470
    281 1.0592154470 1.0594330946
    282 1.0594330946 1.0596507869
    283 1.0596507869 1.0598685239
    284 1.0598685239 1.0600863057
    285 1.0600863057 1.0603041322
    286 1.0603041322 1.0605220035
    287 1.0605220035 1.0607399196
    288 1.0607399196 1.0609578804
    289 1.0609578804 1.0611758861
    290 1.0611758861 1.0613939365
    291 1.0613939365 1.0616120317
    292 1.0616120317 1.0618301718
    293 1.0618301718 1.0620483566
    294 1.0620483566 1.0622665863
    295 1.0622665863 1.0624848609
    296 1.0624848609 1.0627031802
    297 1.0627031802 1.0629215445
    298 1.0629215445 1.0631399536
    299 1.0631399536 1.0633584076
    300 1.0633584076 1.0635769065
    301 1.0635769065 1.0637954503
    302 1.0637954503 1.0640140390
    303 1.0640140390 1.0642326726
    304 1.0642326726 1.0644513511
    305 1.0644513511 1.0646700746
    306 1.0646700746 1.0648888430
    307 1.0648888430 1.0651076563
    308 1.0651076563 1.0653265146
    309 1.0653265146 1.0655454179
    310 1.0655454179 1.0657643662
    311 1.0657643662 1.0659833595
    312 1.0659833595 1.0662023977
    313 1.0662023977 1.0664214810
    314 1.0664214810 1.0666406093
    315 1.0666406093 1.0668597826
    316 1.0668597826 1.0670790010
    317 1.0670790010 1.0672982643
    318 1.0672982643 1.0675175728
    319 1.0675175728 1.0677369263
    320 1.0677369263 1.0679563249
    321 1.0679563249 1.0681757686
    322 1.0681757686 1.0683952573
    323 1.0683952573 1.0686147912
    324 1.0686147912 1.0688343701
    325 1.0688343701 1.0690539942
    326 1.0690539942 1.0692736634
    327 1.0692736634 1.0694933778
    328 1.0694933778 1.0697131373
    329 1.0697131373 1.0699329419
    330 1.0699329419 1.0701527918
    331 1.0701527918 1.0703726868
    332 1.0703726868 1.0705926269
    333 1.0705926269 1.0708126123
    334 1.0708126123 1.0710326429
    335 1.0710326429 1.0712527187
    336 1.0712527187 1.0714728397
    337 1.0714728397 1.0716930059
    338 1.0716930059 1.0719132174
    339 1.0719132174 1.0721334741
    340 1.0721334741 1.0723537761
    341 1.0723537761 1.0725741234
    342 1.0725741234 1.0727945159
    343 1.0727945159 1.0730149537
    344 1.0730149537 1.0732354368
    345 1.0732354368 1.0734559652
    346 1.0734559652 1.0736765390
    347 1.0736765390 1.0738971580
    348 1.0738971580 1.0741178224
    349 1.0741178224 1.0743385322
    350 1.0743385322 1.0745592872
    351 1.0745592872 1.0747800877
    352 1.0747800877 1.0750009335
    353 1.0750009335 1.0752218247
    354 1.0752218247 1.0754427613
    355 1.0754427613 1.0756637432
    356 1.0756637432 1.0758847706
    357 1.0758847706 1.0761058434
    358 1.0761058434 1.0763269617
    359 1.0763269617 1.0765481253
    360 1.0765481253 1.0767693344
    361 1.0767693344 1.0769905890
    362 1.0769905890 1.0772118890
    363 1.0772118890 1.0774332345
    364 1.0774332345 1.0776546255
    365 1.0776546255 1.0778760620

    Please acknowledge understanding.
    ROLCAM's Avatar
    ROLCAM Posts: 1,420, Reputation: 23
    Ultra Member
     
    #4

    Mar 16, 2009, 02:59 AM
    3 ) Kerri deposits $8,000 in a bank account today. She makes another deposit of $14,000 into the account at the end of year one and she makes a third deposit of $10,000 at the end of year twoNo additional deposits are made. If the bank pays interest at 8 percent compounded annually, how much will she have in her account at the end of eight years?

    YEARS
    1 8,000.0000 8,640.0000
    2 22,640.0000 24,451.2000
    3 34,451.2000 37,207.2960
    4 37,207.2960 40,183.8797
    5 40,183.8797 43,398.5901
    6 43,398.5901 46,870.4773
    7 46,870.4773 50,620.1155
    8 50,620.1155 54,669.7247

    Please acknowledge understanding.

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