Question

*Burt deposits $10,000 into a bank account today. The account earns 4% per annum compounding daily for the first 3 years, then 3.5% per annum compounded quarterly thereafter. No further deposits or withdrawals will be made. For this question, assume all months are of equal length and ignore leap years. (a) Calculate the account balance six months from today. (b) Calculate the account balance 3 years from today. (c) Calculate the account balance 3.5 years from today. (d) Calculate the account balance 10 years from today.

Assume all months are 30 days = 360 days a year.

Answer 1

a)

The account balance six months from today is calculated using the following equation

Account balance six months from today = $ 10202.00

-----------------------------------------------------------------

b)

Account balance three years from today = $ 11,274.89

-------------------------------------------------------------------

c)

Account balance 3.5 years from today = $ 11,473.06

-------------------------------------------------------------------------------------

d)

Account balance 10 years from today = $ 14389.70