grantamato
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- Dec 18, 2017
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How was this problem wrong? (My work is in blue; the correct answers are in red.)
3. Calculate the future value of $5,550 earning 1.5% interest for three years, compounded
(a) daily
. . . . .\(\displaystyle \color{blue}{A\, =\, 5500\, \left(1\, +\, \dfrac{0.015}{360}\right)^{360\, (3)}}\)
. . . . .\(\displaystyle \color{blue}{A\, =\, \$5753.15}\). . . . .\(\displaystyle \color{red}{ \$5805.45 }\)
(b) monthly
. . . . .\(\displaystyle \color{blue}{A\, =\, 5500\, \left(1\, +\, \dfrac{0.015}{12}\right)^{12\, (3)}}\)
. . . . .\(\displaystyle \color{blue}{A\, =\, \$5752.99}\). . . . .\(\displaystyle \color{red}{ \$5805.29 }\)
(c) quarterly
. . . . .\(\displaystyle \color{blue}{A\, =\, 5500\, \left(1\, +\, \dfrac{0.015}{4}\right)^{4\, (3)}}\)
. . . . .\(\displaystyle \color{blue}{A\, =\, \$5752.67}\). . . . .\(\displaystyle \color{red}{ \$5804.97 }\)
I got credit for using the right formula and plugging in the right numbers, but my answer was wrong!! How? Formula is A=P(1+r/n)^nt
3. Calculate the future value of $5,550 earning 1.5% interest for three years, compounded
(a) daily
. . . . .\(\displaystyle \color{blue}{A\, =\, 5500\, \left(1\, +\, \dfrac{0.015}{360}\right)^{360\, (3)}}\)
. . . . .\(\displaystyle \color{blue}{A\, =\, \$5753.15}\). . . . .\(\displaystyle \color{red}{ \$5805.45 }\)
(b) monthly
. . . . .\(\displaystyle \color{blue}{A\, =\, 5500\, \left(1\, +\, \dfrac{0.015}{12}\right)^{12\, (3)}}\)
. . . . .\(\displaystyle \color{blue}{A\, =\, \$5752.99}\). . . . .\(\displaystyle \color{red}{ \$5805.29 }\)
(c) quarterly
. . . . .\(\displaystyle \color{blue}{A\, =\, 5500\, \left(1\, +\, \dfrac{0.015}{4}\right)^{4\, (3)}}\)
. . . . .\(\displaystyle \color{blue}{A\, =\, \$5752.67}\). . . . .\(\displaystyle \color{red}{ \$5804.97 }\)
I got credit for using the right formula and plugging in the right numbers, but my answer was wrong!! How? Formula is A=P(1+r/n)^nt
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