Question #221512

26.

An investment of $15,000 is made for three years at 4.5%

compounded quarterly.


a)

Determine the maturity value of the investment.

b)

What is the amount of compound interest earned on the

investment?


1
Expert's answer
2021-08-02T06:06:11-0400

FV=PV(1+rn)n×tFV=PV(1+\frac{r}{n})^{n×t}


=15000(1+0.0454)4×3=15000(1+\frac{0.045}{4})^{4×3}


=15000(1.01125)12=15000(1.01125)^{12}


=15000(1.14367)=$17155.05=15000(1.14367)=\$17155.05

Maturity value of the investment=$17155.05=\$17155.05


b) The amount of compound interest earned on the investment

=$17155.05$15000=$2155.05=\$17155.05-\$15000=\$2155.05




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