7,093
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No, that is for 6 years. For 5 years it is 5000*(1.06)5 = 6691.13
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It is 5000*(1.06)4*11/2 = 5000*1.0622 = 5000*3.064 approx = 18017.69 You realise, of course, that 6 percent quarterly is equivalent to over 26% per year!
Your going to fail the test.
Assuming interest is compounded annually, the present value is 5,000 divided by 1.072 .07 is the intererst rate. The exponent is the number of years (2). So the answer is 4,367.20. After the first year, the value is 4367.20 x 1.07 = 4,672.90 Then, at the end of the second year: 4,672.90 x 1.07 = 5,000
The formula to calculate the present amount including compound interest is A = P(1 + r/n)nt where P is the principal amount, r is the annual rate expressed as a decimal , t is the number of years, and n is number of times per year that interest is compounded. In the question, P = 5000, r = 0.07, t = 4, and n = 1 A = 5000(1 + 0.07)4 = 5000 x 1.074 = 5000 x 1.310796 = 6553.98