John is the beneficiary of a trust fund set up for him by his grandmother. If the trust fund amounts to $20,000 earning 8% compounded semiannually and he is to receive the money in equal semiannual installments for the next 15 years, how much will he receive each 6 months?
Solution Preview
Suppose John receive x dollars each 6 months. 15 years is equal to 30 semiyears. The rate of interest is 8% compounded semiannually. The fund is $20,000 at the beginning.
After first 6 months, the trust fund ...
Solution Summary
This shows how to calculate the installments of payout for a trust fund.
Compound Interest Problems. If the tuition at a certain college is determined to cost $ 32000 in 10 years, how large must a trust fund that pays 7.5% compounded...
... percent compound interest. c. increase in value at the same rate as any other account paying 6 percent interest, regardless of how the interest is compounded. ...
... Option 1: 6% compounded interest quarterly for 5 years. Option 2: 8% compounded interest annually for 5 years. Option 3: 14.5% simple interest for 10 years. ...
... The effects of using compound interest is: 1) It gives accurate ... WE can also use the compounding technique to find ... we have to find out the compounded value of ...
... However, compound interest pays on the principal and the interest that is gained ... three The money grew at a faster rate by compounding the interest over time ...
... borrows $3250 from a friend at 9% interest compounded annually for ... Find the compound amount he must pay back at ... 2, P = 3250, n = 1 for compounding annually, t ...
... and Quarterly Compound Interest. 1) For a five year period, Ken deposited $800 each quarter into an account paying 2.6% annual interest compounded quarterly. ...
...Compound interest arises when interest is added to the principal, so that from that ... A loan, for example, may have its interest compounded every month: in this ...
