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Math Help - One Question on interest.

  1. #1
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    One Question on interest.

    Mary invests $10,000 at 4.5% interest a year, compounded quarterly.

    (A)How much will she have after 20 years?

    (B) If the interest were compound semi-monthly, how much more would Mary have after 20 years than compounded quarterly?

    Equation


    A=P[1+r/k]^kt


    I got 24,472 after 20 years

    But I dont know how to do the second part (B)
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  2. #2
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    Quote Originally Posted by WallStreet View Post
    Mary invests $10,000 at 4.5% interest a year, compounded quarterly.

    (A)How much will she have after 20 years?

    (B) If the interest were compound semi-monthly, how much more would Mary have after 20 years than compounded quarterly?

    Equation


    A=P[1+r/k]^kt


    I got 24,472 after 20 years

    But I dont know how to do the second part (B)
    24 semi-monthly periods in a year ...

    10000\left(1 + \frac{.045}{24}\right)^{20(24)}
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  3. #3
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    thanks. Did i do part A correctly?
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  4. #4
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    close enough ... I got 24472.75
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