# Compound Interest Homework 2 3.docx - Compound Interest...

• 6

Course Hero uses AI to attempt to automatically extract content from documents to surface to you and others so you can study better, e.g., in search results, to enrich docs, and more. This preview shows page 1 - 5 out of 6 pages.

Compound Interest HomeworkName of StudentCourse CodeInstructor NameDue Date
Answers1.a)\$ 166.93b) \$ 417,333.12c) \$ 1,669,332.47d) Part a (the effective yield of the account) could be directly multiplied by the amounts in partsb and c to determine them.2. a)\$ 19,143.20b) \$ 245,998.86c) 41.32 years3. a) I will use \$ 100 for P, 10% for r, and 1 for nb) I will use the compound interest formula shown below to calculate the amount saved forretirement:Amount saved = P (1 + r/n)n[1- (1 +r/n)nt] / [1- (1 + r/n)n]Still, I will use \$100 for P, 10% for r, and 1 for nUpon plugging into the equation, it’s simplified as such:Amount saved = \$100 (1 + 0.1/1)1[1- (1 +0.1/1)1*t] / [1- (1 + 0.1/1)1]Amount saved = \$ 110 [1 - 1.1t] / -0.1Amount saved = \$ -1100 [1 - 1.1t]c) From calculation:tAmount saved (\$)111022313364.14510.515671.566848.7271043.58
81257.9591493.74101753.12112038.43122352.27132697.50143077.25153494.97163954.47174459.92195627.50206300.25217040.27227854.30238749.73249734.702510818.182612009.992713,320.992814763.092916349.403018094.343120013.783222125.153324447.673427002.443529812.683632903.953736304.343840044.783944159.264048685.184153663.704259140.074365164.084471790.484579079.534687097.494795917.2348105,618.9649116,290.8550128,029.94The graph obtained is thus:
0102030405060020000400006000080000100000120000140000Amount saved (\$) against t (years)t (years)Amount saved (\$)d) I want to retire when I am 65 years old.I am currently 25 years old, or 40 years till I retire thus.

Course Hero member to access this document

Course Hero member to access this document

End of preview. Want to read all 6 pages?

Course Hero member to access this document

Term
Spring
Professor
N/A