Respuesta :
a) Future value is $17061.98
b)
Explanation:a) Principal = $10427
rate = 4.502% = 0.04502
time = 11 years
n = number of times compounded = quarterly
n = 4
FV = future value = ?
To get the future value, we will apply compound interest formula:
[tex]FV\text{ = P(1 +}\frac{r}{n})^{nt}[/tex][tex]\begin{gathered} FV\text{ = }10427(1\text{ + }\frac{0.04502}{4})^{4\times11} \\ FV\text{ = }10427(1\text{ + }0.011255)^{44} \\ FV\text{ = }10427(1\text{ }.011255)^{44} \end{gathered}[/tex][tex]\begin{gathered} FV\text{ = }10427(1\text{ }.011255)^{44} \\ FV\text{ = 17061.97}81 \\ \\ FV\text{ = \$17061.98} \end{gathered}[/tex]Future value is $17061.98
b) For continuous compounding, the formula is given by:
[tex]P_t=P_0e^{rt}[/tex][tex]\begin{gathered} P_t\text{ = future value = ?} \\ r\text{ = rate = 0.04502} \\ t\text{ = 11 years} \\ P_0\text{ = prinicipal = 10427} \end{gathered}[/tex][tex]undefined[/tex]