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Assignment No. 5

The document presents calculations for savings and investment scenarios involving compounded interest. It details how much Peter will accumulate by saving $100 monthly for 5 years at a 5.5% interest rate, and how an employer's annual deposit of $10,000 will grow over 10, 20, 30, and 40 years at a 7% interest rate. Additionally, it calculates the future value of a $1,000 monthly deposit for 5 months at 2% interest, and the amount after 2 months post-deposit.

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Lesly ann Martinez
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8 views3 pages

Assignment No. 5

The document presents calculations for savings and investment scenarios involving compounded interest. It details how much Peter will accumulate by saving $100 monthly for 5 years at a 5.5% interest rate, and how an employer's annual deposit of $10,000 will grow over 10, 20, 30, and 40 years at a 7% interest rate. Additionally, it calculates the future value of a $1,000 monthly deposit for 5 months at 2% interest, and the amount after 2 months post-deposit.

Uploaded by

Lesly ann Martinez
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
You are on page 1/ 3

Cyreen S.

Espinosa
BSEd Math 2-2

Assignment no. 5

1.) To buy a car in about 5 years, Peter saves 100 per month. How much will he have
accumulated at the end of 5 years if he manages to earn a rate of 5.5% compounded monthly
on his savings?
Given:

R = 100

t = 5yrs

m = 12

j = 5.5% = 0.055

n = mt = (5) (12) = 60

Solution:
j n
S = R[ ]
(1 + m
​ ) −1
j
​

m
​

0.055 60
S = 100 [ ]
(1 + 12 )
​ −1
0.055
​

12
​

S = 6888.08

2.) At age 21, an employer begins putting away 10,000 per year. How much money will be in
the account at the end of 10, 20, 30 and 40 years? Assume i = 7%.
Given:
R = 10000

m=1

t = 10, 20, 30, 40 yrs

i = 7% = 0.07

Solution:

a.) 10 yrs
mt
(1 + i) −1
S = R[ ​ ]
i

S = 10000 [ ]
(1 + 0.07)1 (10) − 1
0.07
​

S = 138164.48

b. 20 yrs
(1 + i)mt − 1
S = R[ ] ​

S = 10000 [ ]
(1 + 0.07)1 (20) − 1
​

0.07
​

S = 409954.92

c. 30 yrs
(1 + i)mt − 1
S = R[ ] ​

S = 10000 [ ]
(1 + 0.07)1 (30) − 1
0.07
​

S = 944607.86

d. 40 yrs
(1 + i)mt − 1
S = R[ ] ​

S = 10000 [ ]
(1 + 0.07)1 (40) − 1
0.07
​

S = 1996351.12
3.) Kikoman deposits 1000 at the end of each month for five months in an account paying 2%
compounded monthly. If he makes no more deposits, how much will he have in his account 2
months after the last deposit is made?

Given:

R = 1000
5
t = 5mnths =
12
​

j = 2% = 0.02

m = 12

n = mt = (12) ( 5 ) = 5
12
​

Solution:
j n
S = R[ ]
(1 + m
) ​ −1
j
​

m
​

0.02 5
S = 1000 [ ]
(1 + 12 ) ​ −1
0.02
​

12
​

S = 5016.694468

Given:

P = S = 5016.694468

t = 2 mnths = 2
12
​

m = 12

n = mt = (12) ( 2 ) = 2
12
​

j = 2% = 0.02

Solution:
j n
F = P (1 + )​

m
2
F = 5016.694468 (1 + 0.02 )
12
​

F = 5033.43

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