Evan wants to put some money

MAP4C Lesson 10 Assignment
In this assignment you are going to explore the characteristics of compound interest
Make sure you answer all questions in the spaces provided
Part A: Finding the Answer
In this section, you are going to use the formula for calculating compound interest to find the answer.
For each question, answer the question giving the clues that you used in determining your answer. You will be given two
marks – four mark for your correct clues and one mark for the correct answer.
___d_ 1. To yield $8000 in three years in an investment that pays interest at a rate of 5% per year, compounded semi-
annually, how much would you have to invest?
a. $6691.10 b. $6716.95 c. $6887.81 d. $6898.37
__c__ 2. To yield $5000 in two years in an investment that pays interest at a rate of 7.25% per year, compounded
quarterly, how much would you have to invest?
a. $4000.91 b. $4327.00 c. $4330.73 d. $4449.98
___b_ 3. To yield $2500 in five years in an investment that pays interest at a rate of 4.5% per year, compounded
annually, how much would you have to invest?
a. $1997.13 b. $2006.13 c. $2047.68 d. $2054.82
Page 1
A= 8000, r = 5 %, n = 2, t = 3
Using formula P = A / (1 + r/n) nt
P = $6898.37
A= 5000, r = 7.25 %, n = 4 , t = 2
Using formula P = A / (1 + r/n) nt
P = $4330.73
A= 2500, r = 4.5 %, n = 1 , t = 5
Using formula P = A / (1 + r/n) nt
P = $2006.13