I need help with a business and finance question

Anonymous
timer Asked: Nov 6th, 2015
account_balance_wallet $5

Question Description

Calculate compound interest: Principle = 1000 compounded annually, for a period of 10 years, at a 11%, 3% and 5% interest rate.

Tutor Answer

josep23
School: University of Virginia

Thank you for the opportunity to help you with your question!

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

Where:

A = the future value of the investment/loan, including interest
P = the principal investment amount (the initial deposit or loan amount)
r = the annual interest rate (decimal)
n = the number of times that interest is compounded per year
t = the number of years the money is invested or borrowed for

for 11 % interest rate

A= 1000 ( 1 +0.11)^10 = 2839.42

I= A-P

I = 2839.42 - 1000

I= 1839. 42

for 5%

A= 1000 ( 1+ 0.05)^10 = 1628.89

I = 1628.89 - 1000

I= 628.89

for 3%

A = 1000 ( 1 + 0.03)^10 =1343.92

I = 1343.92 -1000

I= 343.92

Please let me know if you need any clarification. I'm always happy to answer your questions.

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Review

Anonymous
Goes above and beyond expectations !

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