Ask Experts Questions for FREE Help !
Ask
    seabird01's Avatar
    seabird01 Posts: 1, Reputation: 1
    New Member
     
    #1

    Mar 17, 2012, 09:33 AM
    Compound Interest
    Please help. Struggling with these two compound interest questions.

    1. How much would you need to invest today to have $4,500 in 6 years and 4
    Months, if interest is 3% compounded quarterly?


    2. John invested $5000 at 1.25% compounded semiannually. After 30 months,
    The interest rate increased by 0.75%. How much will the investment be
    Worth after 5 years?
    eeseely's Avatar
    eeseely Posts: 100, Reputation: 3
    Junior Member
     
    #2

    Mar 21, 2012, 08:02 AM
    Using a spreadsheet, divide $4,500 by (1.03)^25.333

    25 comes from (6 yrs times 4) plus 1quarter +1/3 quarter = 25.333

    The answer I got was $2,128.36
    eeseely's Avatar
    eeseely Posts: 100, Reputation: 3
    Junior Member
     
    #3

    Mar 21, 2012, 08:22 AM
    Here we have (1.0123)^5 times $5000 = $5,320.41

    Then we have (1.02)^5 times $5320.41 = $5,874.16

Not your question? Ask your question View similar questions

 

Question Tools Search this Question
Search this Question:

Advanced Search

Add your answer here.


Check out some similar questions!

Compound Interest [ 1 Answers ]

Hello, I purchased a property 28 years ago for $148,000 It was sold for $2,420,000. What is the annualised return for the period? How do you calculate it.

Compound interest [ 1 Answers ]

James wants to take out a loan. Suppose he can afford to make monthly payments of 100 dollars and the bank charges interest at an annual rate of 10 percent, compounded monthly. What is the maximum amount that James could afford to borrow if the loan is to be paid off eventually?

Compound interest [ 1 Answers ]

Can you please tell me how I can calculate manually. If 2000.00 is invested at 4% interest a year, compounded yearly.. How many years would it take to accumulate 100,000 Please help Thanks Miladys


View more questions Search