Even more interests word problems........HELP! .>.<

[Guest]

Heh, I need more help

k, here goes:

Farid needs $5000 for university in 3 years. His parents plan to invest some money in an account paying interest rate of 7.1% per annum, compounded quarterly. How much should they invest now to have $5000 in 3 years?


I did this: ____1______2_______3

----$5000
----------------x(1+.071/4)^2
---------------------------x(1+ .071/4)^3


Up above is my timeline, we're suppose to draw a timeline for each word problem in my class :S

so r = 1.071/4
A= x(1+.071/4)^3
n= 3*4=12

So to find the sum, Sn=a(r^n-1)/r-1
5000= x(1+.071/4)^3 [(1.071/4^12)-1]/1 + .071/4-1

I calculated that up and got" x= $3473.01, but I'm not sure if that's right, I think I may have calcualted it wrong..

___________________________________________________________

Next question: Sophia is borrowing some money to pay the set-up costs for her web site. She predicts she can afford to pay $17 000 for the loan in 2 years. The plan she is arranging offers a loan at 9.8% per annum, compounded monthly. At this rate, how much can she borrow??


I don't get this question -_-' :x

 

[soroban]

Re: Even more interests word problems........HELP! .>.&lt

Hello, anna!

From your other posts, I thought you understood Compound Interest . . .

Farid needs $5000 for university in 3 years.
His parents plan to invest some money in an account paying of 7.1% per annum, compounded quarterly.
How much should they invest now to have $5000 in 3 years?

The interest rate is 0.071/4 per quarter.
There will be 4 x 3 = 12 quarters.

The equation is: . P(1 + 0.071/4)¹² . = . 5000

 

[soroban]

Re: Even more interests word problems........HELP! .>.&lt

Hello, anna!

Your last few posts all have the same type of problems.
Sorry, but I have to ask . . . Are you learning <u>anything</u> from my explanations?

If it is a matter of not-getting-the-right-answer, please check your work.
. . . At least, <u>show</u> your work (as you did before).
It's very annoying to post a detailed explanation and solution
. . . and have someone answer, "Oh, I looked at the wrong answer .. haha!"

Sophia is borrowing some money to pay the set-up costs for her web site.
She predicts she can afford to pay $17 000 for the loan in 2 years.
The plan she is arranging offers a loan at 9.8% per annum, compounded monthly.
At this rate, how much can she borrow??

The same as the last few problems . . .
How much NOW to be worth $17,000 in two years?

9.8% compounded monthly . . . i = 0.098/12
Monthly for 2 years: 24 periods.

We have: . P(1 + 0.098/12)²⁴ .= .17000

 

[Gene]

Your timeline should be

____1______2_______3 
x 
    x(1+.071/4)^4 
           x(1+ .071/4)^8
                   x(1+ .071/4)^12

Soroban answered it first, but this may add something to it.
------------------
Gene

 

[Denis]

"Sophia is borrowing some money to pay the set-up costs for her web site.
She predicts she can afford to pay $17 000 for the loan in 2 years.
The plan she is arranging offers a loan at 9.8% per annum, compounded monthly.
At this rate, how much can she borrow?? "

Don't let the words "loan/borrow" throw you off;
this problem is exactly same as:
How much must be deposited NOW to accumulate to $17,000 in 2 years,
the rate being 9.8% compounded monthly....capish?

 

[Guest]

Re: Even more interests word problems........HELP! .>.&lt

Hello, anna!

Your last few posts all have the same type of problems.
Sorry, but I have to ask . . . Are you learning <u>anything</u> from my explanations?

If it is a matter of not-getting-the-right-answer, please check your work.
. . . At least, <u>show</u> your work (as you did before).
It's very annoying to post a detailed explanation and solution
. . . and have someone answer, "Oh, I looked at the wrong answer .. haha!"

Sophia is borrowing some money to pay the set-up costs for her web site.
She predicts she can afford to pay $17 000 for the loan in 2 years.
The plan she is arranging offers a loan at 9.8% per annum, compounded monthly.
At this rate, how much can she borrow??

The same as the last few problems . . .
How much NOW to be worth $17,000 in two years?

9.8% compounded monthly . . . i = 0.098/12
Monthly for 2 years: 24 periods.

We have: . P(1 + 0.098/12)²⁴ .= .17000

I get how to do compound interests and annunities, I just don't get what equations to use, cuz of the wording in the word problems. I always get confused when it comes to words in math, but I understand the knoledge of it.

Thanks for the explanations
-anna[/b]