Q1: Deposit $1,000 at the end of each month for next 10 years, how much money will I have at the end of 10 years in the following scenarios? A: 6% interest per year compounded monthly. B: 8%: interest per year compounded monthly. Q2: Deposit $1,000 at the end of year 1 and increment the deposit by $100 for the next 4 years, how much money will I have at the end of 5 years in the following scenario? C: 9% interest per year compounded continuously. Q3: What is a real-life application of continuous compounding?

Q1.
A. Monthly interest rate = 6%/12 = 0.5%
Compound interest factor = ((1 + i)n – 1) / i = ((1+0.5%)120 – 1)/0.5% = 163.88 , (for 10 years, numbe rof monthly time periods = 10*12 = 120
Fund value at the end of 10 years = 1000*163.88 = 163,880
B. Monthly interest rate = 8%/12 = 0.67%
Compound interest factor = ((1 + i)n – 1) / i = ((1+0.67%)120 – 1)/0.5% = 182.95 , (for 10 years, numbe rof monthly time periods = 10*12 = 120
Fund value at the end of 10 years = 1000*182.95 = 182,950
 
“Looking for a Similar Assignment? Get Expert Help at an Amazing Discount!”

What Students Are Saying About Us

.......... Customer ID: 12*** | Rating: ⭐⭐⭐⭐⭐
"Honestly, I was afraid to send my paper to you, but splendidwritings.com proved they are a trustworthy service. My essay was done in less than a day, and I received a brilliant piece. I didn’t even believe it was my essay at first 🙂 Great job, thank you!"

.......... Customer ID: 14***| Rating: ⭐⭐⭐⭐⭐
"The company has some nice prices and good content. I ordered a term paper here and got a very good one. I'll keep ordering from this website."

"Order a Custom Paper on Similar Assignment! No Plagiarism! Enjoy 20% Discount"