A principal of $7000 is invested in an account paying an annual rate of 7%. Find the amount in the account after 5 years if the account is compounded semiannually, quarterly, and monthly. (a) The amount in the account after 5 years if the account is compounded semiannually is? (Round to the nearest cent.)

Find the amount in the account after 5 years if the account is compounded semiannually, quarterly, and monthly.

your equation is:

f = p * (1 + (i/c)) ^ (n*c)

f = future value

p = present value

i = annual interest rate

c = number of compound intervals per year

n = number of years.

your principal is 7000.

your annual interest rate is 7%

you want to find the amount in the account after 5 years.

money is compounded semi-annually, quarterly, and monthly.

money is compounded semi-annually:

p = 7000

i =.07 (annual interest rate percent divided by 100%).

n = 5

c = 2

i/c =.07/2 =.035

n*c = 5*2 = 10

formula becomes:

f = 7000 * (1.035) ^10 = 9874.19

money is compounded quarterly:

p = 7000

i =.07 (annual interest rate percent divided by 100%).

n = 5

c = 4

i/c =.05/4 = 0.0125

n*c = 5*4 = 20

formula becomes:

f = 7000 * (1.0125) ^20 = 8974.26

money is compounded monthly:

p = 7000

i =.07 (annual interest rate percent divided by 100%).

n = 5

c = 12

i/c =.07/12 = 0.005

n*c = 5*12 = 60

formula becomes:

f = 7000 * (1.005) ^60 = 9441.95

(a) The amount in the account after 5 years if the account is compounded semiannually is? (Round to the nearest cent.)

money is compounded semi-annually:

p = 7000

i =.07 (annual interest rate percent divided by 100%).

n = 5

c = 2

i/c =.07/2 =.035

n*c = 5*2 = 10

formula becomes:

f = 7000 * (1.035) ^10 = 9874.19