anonymous
  • anonymous
how much money must be deposited in an account paying 7.25% annual interest, compounded quarterly, to have a balance of $1000 after 10 years?
Mathematics
  • Stacey Warren - Expert brainly.com
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SOLVED
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jamiebookeater
  • jamiebookeater
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dumbcow
  • dumbcow
General formula: B = D(1+i/n)^nt i = int rate n = num of times per year interest credited t=num years
anonymous
  • anonymous
what do you mean b=d?
dumbcow
  • dumbcow
b = ending balance d = initial deposit

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anonymous
  • anonymous
im confused
dumbcow
  • dumbcow
ok lets say you deposit $100 and earn 50% 50% of 100 is 50 so your balance at end of year is 150 so 150=100*(1+0.5)
anonymous
  • anonymous
Compound Formula for calculating compound interest: Where, \[A=P(1+r/t)^{nt}\] A = final amount P = principal amount (initial investment) r = annual nominal interest rate (as a decimal) n = number of times the interest is compounded per year t = number of years
anonymous
  • anonymous
so just plug in the 1000, the interest rate .0725, number of years and compounds per year
anonymous
  • anonymous
i do not know how i would set it up like to plug it in or anything
dumbcow
  • dumbcow
1000=D*(1+.0725/4)^40 solve for D
anonymous
  • anonymous
\[1000/(1+.0725/4)^{40}=P\] That is what you end up with.
anonymous
  • anonymous
solve for t or p?
anonymous
  • anonymous
There is no t to solve for
anonymous
  • anonymous
You already know t, its 10 years
anonymous
  • anonymous
so solve for p?
anonymous
  • anonymous
It's already solved, you just have to plug it into a calculator
anonymous
  • anonymous
or do it by hand if you want to.
anonymous
  • anonymous
1000/(40725/40000)^40 = 487.48

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