Results 1 to 5 of 5

Math Help - Interest accumulated

  1. #1
    Junior Member
    Joined
    Sep 2009
    Posts
    36

    Interest accumulated

    A lady deposits $50 into a fund at the end of each quarter for 10 years. Determine the total amount of interest that she has accumulated at the end of 10 years if the fund earns 4.5% per year compounded annually for the first 5 years and 5% per year compounded semiannually for the second five years.

    I'm getting confused on how you set it up to find the amount of interest. I think the total amount in the account at the end of the 10 years is: 50[(1.045)^20 - 1 / .045] + 50[(1.025^20 - 1 / .025] = 2845.81
    But I dont understand how you figure out how much of that is the interest, or if you even need to caclulate the total amount at all...
    Follow Math Help Forum on Facebook and Google+

  2. #2
    Member
    Joined
    Apr 2008
    Posts
    83
    Quote Originally Posted by tbl9301 View Post
    I think the total amount in the account at the end of the 10 years is: 50[(1.045)^20 - 1 / .045] + 50[(1.025^20 - 1 / .025] = 2845.81
    Try again with these:

    <br />
50\frac{{\left( {1 + {\textstyle{{0.045} \over 1}}} \right)^{5 \times 1}  - 1}}{{\left( {1 + {\textstyle{{0.045} \over 1}}} \right)^{{\textstyle{1 \over 4}}}  - 1}}\left( {1 + {\textstyle{{0.05} \over 2}}} \right)^{5 \times 2}  + 50\frac{{\left( {1 + {\textstyle{{0.05} \over 2}}} \right)^{5 \times 2}  - 1}}{{\left( {1 + {\textstyle{{0.05} \over 2}}} \right)^{{\textstyle{2 \over 4}}}  - 1}}<br />

    Quote Originally Posted by tbl9301 View Post
    But I dont understand how you figure out how much of that is the interest
    This is quite easy as my esteemed fellow knight-errant Sir Denis (or as he is known here as Sir Wilmer) will tell you.
    Follow Math Help Forum on Facebook and Google+

  3. #3
    Junior Member
    Joined
    Sep 2009
    Posts
    36
    Hmm so I had been setting up in terms of "s angle n" , ie 50*(s angle 20).045 + 50*(s angle 20).025 , which is equal to what I typed above

    So does your answer correlate with those terms or is that just how you're supposed to set it up ... if that makes any sense
    Follow Math Help Forum on Facebook and Google+

  4. #4
    Junior Member
    Joined
    Sep 2009
    Posts
    36
    Nevermind scratch that I see where you got it ... thank you!!
    Follow Math Help Forum on Facebook and Google+

  5. #5
    MHF Contributor
    Joined
    Dec 2007
    From
    Ottawa, Canada
    Posts
    3,069
    Thanks
    65
    Quote Originally Posted by jonah View Post
    This is quite easy as my esteemed fellow knight-errant Sir Denis (or as he is known here as Sir Wilmer) will tell you.
    OK, Sir Jonah: "this is quite easy" .
    Follow Math Help Forum on Facebook and Google+

Similar Math Help Forum Discussions

  1. Replies: 4
    Last Post: December 5th 2011, 05:26 PM
  2. Replies: 2
    Last Post: October 7th 2010, 10:12 AM
  3. Accumulated value of an annuity
    Posted in the Business Math Forum
    Replies: 11
    Last Post: September 15th 2009, 01:23 PM
  4. Accumulated Amount of Money
    Posted in the Business Math Forum
    Replies: 1
    Last Post: December 3rd 2008, 06:41 PM
  5. Accumulated Fund Value -
    Posted in the Business Math Forum
    Replies: 5
    Last Post: September 19th 2008, 10:42 AM

Search Tags


/mathhelpforum @mathhelpforum