Question #117578
without using finance calculator,
(a) Haziq invests RM15,000 in a fund at 7% compounded quarterly. After t years, the value of the investment is RM300,000. Determine the value of t.
(b) Sarah invested RM5000 into an account that pays 5% compounded semiannually. She intended to keep the account untouched for 5 years. However, after 3 years, she had to withdraw RM3000. Find the amount left in the account after five years from the time she made her investment.
1
Expert's answer
2020-05-24T18:10:08-0400

a) After t years initial investment of RM15,000 would have value:

15000(1+0.07/4)4t=30000015 000*(1+0.07/4)^{4t}=300000

which means that:

1.01754t=201.0175^{4t}=20

t=log1.0175204t=\frac{\log_{1.0175}20}{4}

t43.169t\approx43.169 years


b) After three years Sarah had in her account the following sum:

5000(1+0.05/2)65000*(1+0.05/2)^6

After withdrawal of 3 000 she had:

5000(1+0.05/2)630005000*(1+0.05/2)^6-3000

After two more years (i.e. five years she made her investment) she had:

[5000(1+0.05/2)63000][1+0.05/2]43088.984[5000*(1+0.05/2)^6-3000]*[1+0.05/2]^4\approx3088.984 RM



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