Find the maturity value. Principal 1,400 % rate 16% time 6 yrs?


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Oddman Profile
Oddman answered
If the correct answer is what you say, there is a crucial piece of information missing from the problem statement. How often is the interest compounded?

For compound interest, a one-time investment of a principal amount P at an annual interest rate I compounded n times per year for m years will have a maturity value of A.
  A = P(1+ (I/n))^(n*m)
Putting your numbers into this equation and assuming quarterly compounding, we get
  A = 1400(1 + (.16/4))^(4*6)
This is easily evaluated by the Google search box to give
  1 400 * ((1 + (.16 / 4))^(4 * 6)) = 3 588.62583
So we conclude
  A = 3,588.63

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