MM255 Unit 6 Project Form Joey D. FInley

MM255 Unit 6 Project Form Joey D. FInley - Unit 6 Compound...

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Unit 6: Compound Interest - Project You must show your work on all problems.  You may type your answer right into this document. Total points for project:  45 points.  Projects must be submitted as a Microsoft Word document and uploaded to the Dropbox for Unit 1 All Projects are due by Tuesday at 11:59 PM ET of the assigned Unit. NOTE:  Project problems should not be posted to the Discussion threads. Questions on the project  problems should be addressed to the instructor by sending an email or by attending office hours. Part I.   Basic Computations 1. Find the future value (5 points) and compound interest (5 points) on \$5,000 for three years if  the interest is compounded semiannually at 12%.   Answer:   FV= P(1+r/n) n*t 5000[1+(12%/2)] 2*3 5000(1+6%) 6 5000(1.06) 6 5000(1.41852)= \$7092.60 is Future Value , 7092.60-5000= \$2092.60 is Compund Interest. 2.  You have \$10,000 that you plan to invest in a compound-interest bearing interest.  Your investment agent  advises you that you can invest the \$10,000 at 8% compounded quarterly for three years or you can invest it at 8  ¼  % compounded annually for three years.  Which investment should you choose to receive the most interest?  (10 points)  Answer:    a. Fv= P(1+r/n) n*t 10,000[1+(8%/4)] 4*3 10,000(1.02) 12

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