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Compounded interest analysis

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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?

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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
See Also This Related BrainMass Solution

Regression Analysis 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. (Round your answers to the nearest cent.)

(a) How much money was in the account at the end of 5 years?
(b) How much interest was earned during the 5 year period?
Ken then made no more deposits or withdrawals, and the money in the account continued to earn 2.6% annual interest compounded quarterly, for 3 more years.
(c) How much money was in the account after the 3 year period?
(d) How much interest was earned during the 3 year period?

2) The average temperature in Metropolis in 1970 was 51.5 degrees. In 2010, the average
temperature in Metropolis was 56.7 degrees. Let y be the average temperature in Metropolis in year x, where x = 0 represents the year 1970.
(a) Which of the following linear equations could be used to predict the average Metropolis temperature y in a given year x, where x = 0 represents the year 1970?

A. y = 5.2x + 51.5
B. y = 5.2x − 10,192.5
C. y = 0.13x + 51.5
D. y = 0.13x − 204.6

(b) Use the equation from part (a) to predict the average temperature in Metropolis in the year 2040.
(c) Fill in the blanks to interpret the slope of the equation: The rate of change of temperature with respect to time is ______________________ per ________________. (Include units of measurement.)

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