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anonymous

  • one year ago

Need help with completing the table below with the amounts you would have if you invested $1,000 for at 5% interest with simple interest and with interest compounded annually. Round to the nearest cent. Compound Interest 1 year $1050 2 years $ 3 years $ 4 years $ 5 years $

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  1. anonymous
    • one year ago
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    I know that for the first year it's $1050

  2. anonymous
    • one year ago
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    Well, the formula for this is Interest = Price * rate * time. So, I is what we need to find. So, I = (1,000) (0.05) (1) is 50. So, for year 1, it is 1,050. Using the same formula, can you figure out the rest?

  3. anonymous
    • one year ago
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    $1100 for year two?

  4. anonymous
    • one year ago
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    Yes. Good Job!

  5. anonymous
    • one year ago
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    And then $1150

  6. anonymous
    • one year ago
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    Yes. Just keep using that formula and you should get the rest.

  7. anonymous
    • one year ago
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    wait but wouldn't this be it for simple interest? We are looking for compound?

  8. anonymous
    • one year ago
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    hmm.

  9. anonymous
    • one year ago
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    Well, for compound interest, Amount = Principal * (1 + rate / number of times per year) ^time

  10. anonymous
    • one year ago
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    You see because I have the values we are getting for the simple interest table, and it's saying I got those values correct. But what I'm trying to do is complete the second column which is titled compound interest values.

  11. anonymous
    • one year ago
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    That's what I did before but it said my values were incorrect, Can I show you what I did?

  12. anonymous
    • one year ago
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    Sure.

  13. anonymous
    • one year ago
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    Ok, so for the first year I did 1000(1+.05/1)^1

  14. anonymous
    • one year ago
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    I got the fist value which is correct 1050

  15. anonymous
    • one year ago
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    But for the remaining years here's what I did: 1000(1+.05/2)^2

  16. anonymous
    • one year ago
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    But I'm assuming my substitution is wrong

  17. anonymous
    • one year ago
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    Do you happen to see what I'm doing wrong?

  18. anonymous
    • one year ago
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    are you sure you typed it in right?

  19. anonymous
    • one year ago
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    Oh! Perhaps you did not do the order of operations. See, do the (1 + 0.05/2) first, then the ^2, and then the 1,000? When doing that I got, 1,050.625.

  20. anonymous
    • one year ago
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    That's what I got too

  21. anonymous
    • one year ago
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    It said my answers were wrong. Do you think it could be the rounding to the nearest cent?

  22. anonymous
    • one year ago
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    I put in 1050.62

  23. anonymous
    • one year ago
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    Perhaps so. Then it would be 1,050.625 = 1,050.63

  24. anonymous
    • one year ago
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    That's what I had originally put but it said I'm wrong

  25. anonymous
    • one year ago
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    Maybe I'll try emailing my instructor

  26. anonymous
    • one year ago
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    Oh wait. you said you put in 1,050.62. When you round up its .63 not 2?

  27. anonymous
    • one year ago
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    Ok and for the next years would these be correct then? $1050.84 $1050.94 $1051.10

  28. anonymous
    • one year ago
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    They all came out to being wrong when I originally put them in

  29. anonymous
    • one year ago
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    For year 3, I got 1,033.61...? Double checked it as well.

  30. anonymous
    • one year ago
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    See if you get that.

  31. anonymous
    • one year ago
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    I'm not getting that, I must be putting it in wrong

  32. anonymous
    • one year ago
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    Are both year 4 & 5 wrong as well?

  33. anonymous
    • one year ago
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    OH. DANGIT. SORRY that's me.

  34. anonymous
    • one year ago
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    I forgot to change the exponent to 3. So, yes. 1,050.83 is correct =).

  35. anonymous
    • one year ago
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    Do you mean for year three?

  36. anonymous
    • one year ago
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    yes.

  37. anonymous
    • one year ago
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    Because then wouldn't the values just be decreasing and then increasing?

  38. anonymous
    • one year ago
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    From 1033.61 for year 2 to year 3

  39. anonymous
    • one year ago
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    I guess thats what it is?

  40. anonymous
    • one year ago
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    So do the rest of the values for year 4&5 seem correct?

  41. anonymous
    • one year ago
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    um year 3 is 1,050.83, Year 4 is 1,050.94, and year 5 is 1,051.01. So yes.

  42. anonymous
    • one year ago
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    it's still incorrect when I put it in, but thank you!

  43. anonymous
    • one year ago
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    I'll email my instructor and figure it out

  44. anonymous
    • one year ago
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    Your Welcome! Msg me if you need help again! =)

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