CPM Homework Help : PC Problem 8-47

Most investments receive compound interest as opposed to simple interest. This allows an investment to earn interest on the interest already received. Miranda plans to invest $5000. Find the value of the investment after one year, given the following rates: Homework Help ✎
1. Annual interest of 12% compounded monthly. Hint: See part (d) of the previous problem.
2. Annual interest of 8% compounded quarterly (4 times per year).
3. Annual interest of 5.2% compounded weekly.
4. Annual interest of 7.3% compounded daily.

Answer (a):

y = 5000(1.01)¹²
y = 5,634.13 dollars

Answer (b):

y = 5000(1.02)⁴
y = 5,412.16 dollars

Hint (c):

Follow the same thinking process as in the parts above.

Hint (d):

Follow the same thinking process as in the part (a) and (b) above.