Multi-Phase Compound Interest Questions


1.     When Simon was born, his parents invested $1000 in an account that pays 4.4%/a, compounded quarterly.  On Simon's sixth birthday, his parents deposited an additional $1000.  How much will be in the account on Simon's 18th birthday?        Answer:  $3888.94


2.     Marguerite invests $2300 in the bank at 3.6%/a, compounded semi-annually.  Three years later, the bank calls to tell her that the interest rate is the same, but the compounding frequency is now monthly.  How much money will be in her account 5 years after this change?        Answer:   $3063.87


Video Solutions to Number 1 and 2