Mathematics
StepanieAmescua838
17

you put $2000 into a college savings account that pays interest at an annual rate of 4%. if you make no additional deposits or withdrawals from the account answer the following questions. how much will be in the account after 3 years? how much will be in the account after 3 years compounded weekly? how many years will it take for the account to contain $2500? how many years will it take for the account to contain $3000?

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(1) Answers
joycesouza

Total = principal * (1 +rate)^years Total = 2,000 * (1.04)^3 Total = 2,249.73 ************************************************************ Compounded Weekly Total = principal * (1 +(rate/52))^years*52 Total = 2,000 * (1.000769230769230769)^3*52 Total = 2,254.89 ********************************************************** $2,000 4% compounded annually When will it reach $2,500? Years = {log(total) -log(Principal)} ÷ log(1 + rate) Years = [ log(2500) - log(2000) ] / log (1+ .04) Years = [ 3.3979400087 - 3.3010299957 ] / 0.0170333393 Years = 5.6894312564 (about 5.69 rounded) ********************************************************** $2,000 4% compounded annually When will it reach $3,000? Years = {log(total) -log(Principal)} ÷ log(1 + rate) Years = [ log(3000) - log (2,000) ] / log (1.04) Years = [  3.4771212547 -  3.3010299957 ] /  0.0170333393 Years = 0.176091259 / 0.0170333393 Years = 10.3380350675 (about 10.34 Years rounded) Here's a calculator to double-check the work: http://www.1728.org/compint.htm

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