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Compounded interest analysis

1. At the end of each year, $2000 is deposited into an account paying 4% compounded annually. Complete the following chart to determine the balance in the account after 5 years. Submit only the data for 5 years.

YEAR BEGINNING BALANE DEPOSIT INTEREST ENDING BALANCE

2. $12000 is deposited at the end of each quarter he into an account paying 6% compounded quarterly. What is the balance after 3years? What is the total interest earned?

3. $5000 is deposited at the end of each month into an account paying 9% compounded monthly. What is the balance at the end of 5years?

4. $3000 is deposited at the end of each quarter into a sinking fund 10% compounded quarterly. What is the balance after 7 years? What is the total interest earned?

5. Pet-R-Us is required to set up a sinking fund to accumulate $2000 by the end of 5 years. How much should be deposited at the end of January and July if the fund pays 3% compounded semi annually. What is the total interest earned?

6. In order to accumulate $5000 for the down payment on a car, how much should Ellsie deposit at the end of each month for the next two years into an account paying 6% compounded monthly?

Solution Preview

Hi there,

Thanks for letting me work on your post. Here is my explanation:

1. A=P*(1+r)^t=2000*(1+4%)^5=2433.31
The balance in the account after 5 years is $2433.31.

2. ...

Solution Summary

The solution provides explanations how to find out the total balance based on the compounded interest.

$2.19