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find the amount of money in the bank account given the following conditions:
initial deposit= $5000, annual rate= 3%, time= 2 years
 2 years ago
 2 years ago
find the amount of money in the bank account given the following conditions: initial deposit= $5000, annual rate= 3%, time= 2 years
 2 years ago
 2 years ago

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adnanchowdhuryBest ResponseYou've already chosen the best response.1
a = initial deposit, r = 1.03, n = 2
 2 years ago

jenni_fowlerBest ResponseYou've already chosen the best response.1
says answer is 5,304.50
 2 years ago

GTBest ResponseYou've already chosen the best response.4
It should be 5000 * (1.03)^2. Assuming compounding of the interest rate.
 2 years ago

jenni_fowlerBest ResponseYou've already chosen the best response.1
oh so its 5000(1.03)^2
 2 years ago

waheguruBest ResponseYou've already chosen the best response.0
Gt where dide u get the 1.3 from
 2 years ago

GTBest ResponseYou've already chosen the best response.4
At the end of first year, you will have: 5000 + 5000 * 0.03 = 5000 * (1.03). At the end of second year, you will have: 5000 * (1.03) + 5000 * (1.03) * (0.03) Because you earn interest in the second year on the interest amount of the first year. So, that is same as: 5000 * (1.03)^2. In general, for compounded interest, for n years at rate r and principal p, you get: p * (1+r)^n
 2 years ago

fortheloveofscienceBest ResponseYou've already chosen the best response.0
oh yeah compounding of interest... didnt tought of that
 2 years ago

jenni_fowlerBest ResponseYou've already chosen the best response.1
so how do i get the answer
 2 years ago

GTBest ResponseYou've already chosen the best response.4
Use a calculator to find: 5000 * (1.03) * (1.03). That should give you: 5,304.50
 2 years ago

fortheloveofscienceBest ResponseYou've already chosen the best response.0
yup its correct sir
 2 years ago

jenni_fowlerBest ResponseYou've already chosen the best response.1
thanks it swas 5304.5
 2 years ago

GTBest ResponseYou've already chosen the best response.4
Sometimes, these kind of problems can be formulated such that the interest rate "r" is compounded semiannually or something else. In that case, the "formula" will be similar, but in that case, in p*(1+r)^n, r represents the rate of interest for that period (semiannually for example) and n represents the total "compounding" periods.
 2 years ago

fortheloveofscienceBest ResponseYou've already chosen the best response.0
well we all stupidly used simple interest formula..silly me
 2 years ago

jenni_fowlerBest ResponseYou've already chosen the best response.1
so what is the p r and n represent in the equation
 2 years ago

GTBest ResponseYou've already chosen the best response.4
For example, in this exact same problem, if compounding happened semiannually, then you will have the following at the end of two years: 5000 * (1+0.015)^4
 2 years ago

GTBest ResponseYou've already chosen the best response.4
p is initial amount. n is number of periods.
 2 years ago

GTBest ResponseYou've already chosen the best response.4
r is rate of interest for that period.
 2 years ago

fortheloveofscienceBest ResponseYou've already chosen the best response.0
principle,rate of interest and time period
 2 years ago

jenni_fowlerBest ResponseYou've already chosen the best response.1
so if it were 3000 instead of 5000 and rate was 5.5 and time was 5 years how do i set that up
 2 years ago

fortheloveofscienceBest ResponseYou've already chosen the best response.0
use the same algorithm
 2 years ago

GTBest ResponseYou've already chosen the best response.4
assuming annual compounding.
 2 years ago

jenni_fowlerBest ResponseYou've already chosen the best response.1
ok so its similar to the other one
 2 years ago

jenni_fowlerBest ResponseYou've already chosen the best response.1
did i do it right?
 2 years ago

fortheloveofscienceBest ResponseYou've already chosen the best response.0
hmm i guess so..
 2 years ago

adnanchowdhuryBest ResponseYou've already chosen the best response.1
Oh sorry. My mistake. I gave you the sum formula for geometric progression. The correct formula in this case is: \[a _{n} = ar ^{n1}\], but in this case, you would take it as \[a _{n} = ar ^{n}\]
 2 years ago

jenni_fowlerBest ResponseYou've already chosen the best response.1
so i did it right :D
 2 years ago

jenni_fowlerBest ResponseYou've already chosen the best response.1
thakns again everyone
 2 years ago

fortheloveofscienceBest ResponseYou've already chosen the best response.0
say that to GT
 2 years ago
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