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Unformatted text preview: Unit 6: Compound I nterest  I nstructor Graded 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 6 . 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. A.) Find the future value on $5,000 in three years if the interest is compounded semiannually at 12%. (5 points) Answer: B.) What is the compound interest earned? (5 points) Answer: 2. You have $10,000 that you plan to invest in a compoundinterest 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? Show your work for calculating the interest for both options. (10 points) Answer: 8% Interest: A=10000(1+0.08/4)^3*4 A=10000(1.02)^12 A=10000(1.26824) A=12,682.40 8.25% interest A=10000(1.0825)^3 A=10000(1.26848) A=12,684.80 Part II. Part II....
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This note was uploaded on 08/02/2011 for the course BUS 255 taught by Professor Kathrynbaalman during the Spring '11 term at Kaplan University.
 Spring '11
 KathrynBaalman
 Business, Interest

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