I don't really see what i'm doing wrong...can someone help me out?

thanks

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- November 26th 2010, 02:01 AMlilwayneCompound Interest?
I don't really see what i'm doing wrong...can someone help me out?

thanks - November 26th 2010, 02:34 AMHallsofIvy
It's hard to say what you did wrong when you don't show what you did! I suspect that you used the formula, P(1+ r)^n, where n is the number of compounding periods and r is the interest

**per compounding period**, incorrectly. It looks like you used n= 4, which is correct, compounding every have year for two years means compounding 4 times, but used r= .03 which is wrong. An interest rate of 3% means 3/2= 1.5% or .015 semi-annually. - November 26th 2010, 07:08 AMWilmer
Or calculate the semi-annual rate the $332 results at:

6000(1 + i)^4 = 6332

1 + i = (6332 / 6000)^(1/4)

i = .01355...

That's ~1.36% compared to 1.5% ; so A is better. - November 26th 2010, 09:04 AMlilwayne
i punched in .015 and 1.5 for the rate of interest per compounding period but both are wrong..maybe my other work is wrong? and yeah that's the formula i used.

- November 26th 2010, 10:39 AMWilmer
You're asking us to guess...wrong in what way? Did you change number of periods from 2 to 4?

- November 26th 2010, 03:23 PMlilwayne
the way it goes is i have to punch in values to the blank spaces then press submit, if its wrong it says incorrect.

- November 26th 2010, 06:00 PMWilmer
sigh...

- November 26th 2010, 07:46 PMlilwayne
...yeah i see i'm getting no where here, guess i'll just email my teacher and ask her for help.

- November 26th 2010, 09:16 PMWilmer
Good idea; let us know what you find out...

- November 27th 2010, 02:07 AMlilwayne
ah i see where i went wrong...

A=P(1+r/n)^nt

http://www.mymathforum.com/cgi-bin/mimetex.cgi?P=6000

http://www.mymathforum.com/cgi-bin/mimetex.cgi?r=0.03

http://www.mymathforum.com/cgi-bin/mimetex.cgi?n=2

http://www.mymathforum.com/cgi-bin/mimetex.cgi?t=2

A = 6000(1.015)^4 = 6368.18 - November 27th 2010, 06:36 AMWilmer