Financial Temperature

I'm working on Financial Calculations, finding interest compound.?

I need to find the amount and interest earned when a certain amount of money is compounded. I have two questions I need answered, and I have absolutley no idea how to do it. So, can anyone please please tell me or show me how? If you can.... 1. Determine the amount and interest earned when $10,500 is invested for 4 years at 4.8% compounded monthly. 2. Determine the present value and the interest earned on a loan of $21,500 due in 6 years. The interest rate is 8% compounded quarterly.

Public Comments

1. The easiest way would be to use Excel or another similar program that has built-in functions. The formulas for loan interest are often long and complex. The page below has some calculators that will get the bottom-line answer for you, and the long and complex calculations behind them if you need them (such as homework). I did a quick one on the first: Final Savings Balance: $ 12665.85 Total Interest Earned: $ 2165.85
2. compounded m annually 1 semi-annual 2 quarterly 4 monthly 12 weekly 52 daily 365 n=m*(yr) = total # of deposit yr = # of yr int = %int/100/m pv = present principal value fv = future value = pv*(1+int)^n #1 qtn . pv=10,500 yr=4 m= 12 int=4.8/100/12=0.004 n=12*4=48 fv=? fv=10500*(1+0.004)^(48) #2 qtn fv=21,500 yr=6 int=8/100/4=0.002 pv=? m=4 n=4*6=24 21500=pv*(1+0.002)^(24)