/*! This file is auto-generated */ .wp-block-button__link{color:#fff;background-color:#32373c;border-radius:9999px;box-shadow:none;text-decoration:none;padding:calc(.667em + 2px) calc(1.333em + 2px);font-size:1.125em}.wp-block-file__button{background:#32373c;color:#fff;text-decoration:none} Problem 40 Find the future value of a \(\$ ... [FREE SOLUTION] | 91影视

91影视

Log out

Learning Materials

Features

Discover

Chapter 10: Problem 40

Find the future value of a \(\$ 6500\) investment if the interest rate is \(6.25 \%\) compounded monthly for 3 years.

Short Answer

Expert verified
The future value is approximately $7918.62

Step by step solution

01

Convert interest rate to decimal form

The interest rate is given as 6.25%. Convert this percentage to decimal form by dividing by 100. So the decimal equivalent of 6.25% is \( \frac{6.25}{100} = 0.0625 \)
02

Plug values into the future value formula

Next, plug the known values into the formula \( FV = PV * (1 + r/n)^(nt) \). The present value \( PV \) is $6500. The interest rate \( r \) is 0.0625. Because the interest is compounded monthly, \( n \) is 12. The time period \( t \) is 3 years. Putting these values into the formula gives \( FV = 6500 * (1 + 0.0625 / 12)^(12 * 3) \)
03

Calculate the future value

Perform the calculations inside the parentheses first, then do the exponent, and finally the multiplication to get the future value. This gives \( FV = 6500 * (1 + 0.005208)^(36) = 6500 * (1.005208)^(36) = 6500 * 1.218249661 = \$7918.62 \)
04

Final Answer

After 3 years, a $6500 investment at an annual interest rate of 6.25%, compounded monthly, will grow to approximately $7918.62 .

Unlock Step-by-Step Solutions & Ace Your Exams!

  • Full Textbook Solutions

    Get detailed explanations and key concepts

  • Unlimited Al creation

    Al flashcards, explanations, exams and more...

  • Ads-free access

    To over 500 millions flashcards

  • Money-back guarantee

    We refund you if you fail your exam.

Over 30 million students worldwide already upgrade their learning with 91影视!

One App. One Place for Learning.

All the tools & learning materials you need for study success - in one app.

Get started for free

Most popular questions from this chapter

In Exercises, find the derivative of the function. $$ y=\left(\frac{1}{4}\right)^{x} $$

In Exercises, determine the principal \(P\) that must be invested at interest rate \(r\), compounded continuously, so that \(\$ 1,000,000\) will be available for retirement in \(t\) years. $$ r=7.5 \%, t=40 $$

In Exercises, use a calculator to evaluate the logarithm. Round to three decimal places. $$ \log _{6} 10 $$

In Exercises, use implicit differentiation to find an equation of the tangent line to the graph at the given point. $$ x+y-1=\ln \left(x^{2}+y^{2}\right), \quad(1,0) $$

In Exercises, use the given information to write an equation for \(y\). Confirm your result analytically by showing that the function satisfies the equation \(d y / d t=C y .\) Does the function represent exponential growth or exponential decay? $$ \frac{d y}{d t}=2 y, \quad y=10 \text { when } t=0 $$
See all solutions

Recommended explanations on Math Textbooks

Calculus

Read Explanation

Decision Maths

Read Explanation

Geometry

Read Explanation

Statistics

Read Explanation

Probability and Statistics

Read Explanation

Theoretical and Mathematical Physics

Read Explanation
View all explanations

What do you think about this solution?

We value your feedback to improve our textbook solutions.

Study anywhere. Anytime. Across all devices.