lf 20000 is invested at 7 compounded a annually b semiannual

lf $20,000 is invested at 7% compounded (a) annually, (b) semiannually, or (c) quarterly, what is the amount after 6 years? (a) If it is compounded annually, what is the amount after 6 years? A = $ (Round to the nearest cent as needed.) Enter your answer in the answer box and then click Check Answer

Solution

investment = $ 20,000

rate of interest = 7%

time = 6 years

a) compunded annually

A = P ( 1 + r/n )^nt

A = 20,000 ( 1 + .07)^6

A = $ 30014.61

compounded semiannually

A = 20,000 ( 1+.07/2)^6*2

A = $ 30221.37

c) compunded quarterly

A = 20,000 ( 1+ .07/4)^4*6

A = $ 30328.86