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I have 2 questions involving this concept, that I am looking for an answer for.

  1. Tony is considering putting 50 dollars per month into a special account that would earn 6.25% annual interest. How much would Tony have in his account after 25 years? (nearest cent) (Answer is 36,013.70) I am looking for a formula that would get me this answer

  2. Ross puts 250 dollars into her retirement account at the end of each quarter of the year. The account pays interest of 4 percent compounded quarterly. How much will be in Ross's account at the end of the 1st year? (Answer is 1,015.10) I am looking for a formula that would get me this answer as well

I've tried using this formula Balance(Y) = P(1 + r)Y + c[ ((1 + r)Y - 1) / r ] but it doesn't give exact answers I'm looking for.

Calvin Lin
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gocowboys
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  • Where is your work on this? This site is not a homework completion site; where are you stuck? – amWhy Mar 08 '20 at 18:12
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    This is not my homework, its actually from UIL contest. @amWhy – gocowboys Mar 08 '20 at 18:16
  • Well this site is not a "Answer this for me..." site, no matter where the question originates. Especially for homework AND contest problems. – amWhy Mar 08 '20 at 18:19
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    @amWhy um I've done a lot of research trying to figure out how to get the answer, I'm trying to learn how to these problems. Not sure why you are being so stubborn/arrogant – gocowboys Mar 08 '20 at 18:25
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    Then you surely could add a summary of the "a lot of research" you've done, to add details, context, etc., to your imperative "questions"? Downvotes are fully appropriate when a question shows no research effort. (Hover over the downvote arrow to see for yourself). And I'm perplexed why you're being so stubborn and self-entitled? Besides, it seems you have the answers to each question. – amWhy Mar 08 '20 at 18:28
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    @amWhy I'm new to the forum, I didn't know to do all of that. I have the answers to both because I have an answer key for the competition tests (no solutions). – gocowboys Mar 08 '20 at 18:41

1 Answers1

2

Hints:

  1. Let´s say you have an annual interest rate $i$ and you put $x$ dollars per month on an account every month. Then the amount of money on Tony´s account after $n$ months is

$$C_n=x\cdot \frac{(1+\frac{i}{12})^n-1}{\frac{i}{12}}$$

  1. Here the formula is similar. After $n$ quarters the amount of money on Ross' account is $$C_n=x\cdot \frac{(1+\frac{i}{4})^n-1}{\frac{i}{4}}$$

Do you see the pattern?

callculus42
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