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- For each of the following problems, fi nd the appropriate values of i and n to use in the compound interest formula.
Then fi nd the future value of the given amount of money, assuming interest compounds at the stated interest rate and
compounding frequency for the given period of time.
a. $7,250 at 5% compounded quarterly for 3 years
b. $1,175.09 at 9.27% compounded semiannually for 9 years
c. $2,025.50 at 7.3% compounded daily for 5 years
d. $500 at 3^7 / 8 % compounded monthly for 25 years- For each of the following problems, fi nd the appropriate values of i and n to use in the compound interest formula.
Then fi nd the future value of the given amount of money, assuming interest compounds at the stated interest rate and
compounding frequency for the given period of time.
a. $31,805.23 at 5.47% compounded daily for 10 years
b. $3,000 at 10% compounded quarterly for 1 year
c. $97,500 at 7% compounded daily (bankers rule) for 2 years
d. $2,000 at 9^1 ⁄ 4 % compounded daily for 38 years- Jeremy deposited $2,500 in a certifi cate of deposit paying 4.49% compounded daily for 3 years. How much will he end
up with in his account? - Kim invested $13,700, which earned 5.25% compounded monthly for 5 years. How much interest did she earn?
- The interest rate offered for a 7-year certifi cate by Kossuth Savings Bank is 6.11% compounded daily. How much total
interest would the bank pay on a $3,200 deposit into one of these certifi cates? - How much would I need to deposit into an account paying 4.33% compounded quarterly in order to have $1,000 in 4 years?
- What present value is needed to grow to $2,800 in 10 years if the interest rate is 11.5% compounded daily (bankers’
rule)? - Ramesh wants to have $50,000 in an investment account when his son starts college 17 years from now. Assuming that
the account pays 5.61% compounded daily, how much should he have in the account now? (Assume that he will not
make any additional deposits.) - The interest rate offered on a 5-year certifi cate of deposit at the National Bank of Emporium is 8.42% compounded
daily. If Art deposits $72,500 in one of these CDs, how much will it be worth at maturity? - Olivier invested $362,000. He expects to earn 7^1 ⁄ 4 % compounded quarterly. Assuming he is right about the rate he will
earn, how much will his investment be worth in 20 years?
Exercises 3.2 111