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pat

by saege » Sat Aug 09, 2008 10:05 am
Pat invested x dollars in a fund that paid 8 percent annual interest, compounded annually.
Which of the following represents the value, in dollars, of Pat’s investment plus interest
at the end of 5 years?
A. 5(0.08x)
B. 5(1.08x)
C. [1 + 5(.08)]x
D. (1.08)5x
E. (1.08x)5

D
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by raunekk » Sat Aug 09, 2008 10:48 am
formula:

A=P(1+r/100)^n

n=term period/compounding period= 5/(1)

thus, Total amount= x(1 + 8/100)^5

= x(1.08 )^5
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tks

by saege » Sat Aug 09, 2008 11:19 am
tks
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by missionmba » Sun Aug 10, 2008 1:50 pm
raunekk wrote:formula:

A=P(1+r/100)^n

n=term period/compounding period= 5/(1)

thus, Total amount= x(1 + 8/100)^5

= x(1.08 )^5
@raunekk

Pls correct me if i am wrong

The formula is A=P(1+r/100t)^nt

where t depends on how the interest is compounded
for anuually t =1
for semi anuually t =2
for quarterly t =4
and so forth

also
A=P(1+r/100t)^nt not equal to A=P(1+r/100)^n
right?
Mission Mba

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by raunekk » Sun Aug 10, 2008 2:14 pm
@
missionmba

you are absolutely correct...

Sorry i just wrote the formula keeping this prob. in mind..

I shud hav written d O.formula ...

The formula is A=P(1+r/100t)^nt

where t depends on how the interest is compounded
for anuually t =1
for semi anuually t =2
for quarterly t =4
and so forth
thanks for bringing it to my notice..
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