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Math Help - Compound Interest?

  1. #1
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    Compound Interest?

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

    thanks
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  2. #2
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    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.
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  3. #3
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    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.
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  4. #4
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    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.
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  5. #5
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    You're asking us to guess...wrong in what way? Did you change number of periods from 2 to 4?
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  6. #6
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    the way it goes is i have to punch in values to the blank spaces then press submit, if its wrong it says incorrect.
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  7. #7
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    sigh...
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  8. #8
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    ...yeah i see i'm getting no where here, guess i'll just email my teacher and ask her for help.
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  9. #9
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    Good idea; let us know what you find out...
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  10. #10
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    ah i see where i went wrong...

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







    A = 6000(1.015)^4 = 6368.18
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  11. #11
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    Quote Originally Posted by lilwayne View Post
    ah i see where i went wrong...

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

    A = 6000(1.015)^4 = 6368.18
    Yes. You were told that clearly by HallsofIvy.
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