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A young man is the beneficiary of a trust fund established for him 16 yr ago at his birth. If the original amount placed in trust was $50,000, how much will he receive if the money has earned interest at the rate of 9%/year compounded annually? Compounded quarterly? Compounded monthly? (Round your answers to the nearest cent.)

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oreoluwa2001ng

Answer: $198,515.29, $207,693.20, $209,903.91

Explanation:

Interest calculations:

1. Compounded annually

= A=50,000(1+0.09)^16

A= 50,000(1.09)^16

A=50,000(3.97030588)

A= $198,515.29

2. Compounded quarterly

= A=50,000(1+0.09/4)^16*4

=A= 50,000(1.0225)^64

A=50,000(4.15386394)

A= $207,693.20

3. Compounded monthly

=A=50,000(1+0.09/12)^16*12

A= 50,000(1+0.0075)^192

A=50,000(4.1980781995)

A= $209,903.91

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