Asked by Kristiana Rivera on Jul 02, 2024
When she got married, Lannie Ferguson left all of her personal savings in her own credit union account, which was paying 6% compounded quarterly. Six years later, the same account had increased to $26,871.62. Compute the amount that was in the account when Lannie got married. She made no additional deposits into the account. (Use Tables 16-1A&B or 16-2A&B or a calculator.)
Compounded Quarterly
The process whereby interest is calculated and added to the principal sum every quarter, leading to compound growth.
Personal Savings
The portion of an individual's income that is not spent on consumption and is set aside for future use.
Credit Union
A financial institution that is owned and operated by its members, focusing on providing credit at competitive rates as well as other financial services.
- Understand the concept of compound interest and its applications.
- Apply concepts of time value of money in various financial planning scenarios.
- Employ financial tables or calculators for resolving issues related to the time value of money.
Learning Objectives
- Understand the concept of compound interest and its applications.
- Apply concepts of time value of money in various financial planning scenarios.
- Employ financial tables or calculators for resolving issues related to the time value of money.