Compound interest Determine the future amount of an investme

Compound interest. Determine the future amount of an investment of p=$6200 invested at a rate of r = 4% for time t = 8 years for compounding periods yearly (n=1) quarterly (n = 4) monthly (n = 12), and continuously

Solution

P=$6200   ,   t=8 yrs , r= 4%=.04

A= P(1+ (r/n))^{n t}

a. Compounded annually

Here n=1

A= 6200(1+.04)⁸ = 6200*1.04⁸= $8485.13

b. Compounded quarterly

Here n=4

A= 6200(1+(.04/4))^8*4= 6200 * 1.01³²= $ 8524.63

c. Compounded monthly

Here n=12

A= 6200(1+(.04/12))^12*8 =   $8533.65

d. Compounded continuously

A= P e^rt

A= 6200 e^.04*8= $ 8538.19