**Compound Interest Calculation****Problem Statement:**Use the compound interest formula to find the account balance $ A $, where $ P $ is the principal, $ r $ is the interest rate, $ n $ is the number of compounding periods per year, $ t $ is time in years, and $ A $ is the account balance.**Given Parameters:**| Principal ( $ P $ ) | Interest Rate ( $ r $ ) | Compounded ( $ n $ ) | Time ( $ t $ ) ||-----------------------------|--------------------------------|-------------------------------|-----------------------------------|| \$53,530 | $ \frac{9}{2} \% $ | Quarterly | $ \frac{1}{2} $ |**Formula:**\[ A = P \left( 1 + \frac{r}{n} \right)^{nt} \]**Explanation:**The above table provides the specific values needed to calculate the account balance. **Calculation Steps:**1. **Convert the interest rate from percentage to decimal:** \[ \frac{9}{2} \% = 0.045 \text{ per quarter} \] 2. **Identify the number of compounding periods per year:** Since the interest is compounded quarterly, $ n = 4 $.3. **Calculate the time duration in terms of years:** Given $ t = \frac{1}{2} $.4. **Substitute the values into the compound interest formula:** \[ A = 53530 \left( 1 + \frac{0.045}{4} \right)^{4 \cdot 0.5} \] 5. **Simplify inside the parentheses first:** \[ 1 + \frac{0.045}{4} = 1 + 0.01125 = 1.01125 \]6. **Calculate the exponent value:** \[ 4 \cdot 0.5 = 2 \]7. **Perform the final calculation:** \[ A = 53530 \times (1.01125)^2 \] \[ A \approx 53530 \times 1.02256 \] \[ A \approx 54769.69 \]The account balance is approximately

Future Value: A present asset's future value, abbreviated as FV, is the value that asset is…

Use the compound-interest formula to find the account balance A, where P is principal, r is interest rate, n is number of compounding periods per year, t is time, in years, and A is account balance. P compounded t r 1 $53,530 9-% 2 Quarterly C The account balance is approximately $ (Simplify your answer. Type an integer or decimal rounded to two decimal places as needed.) 1

Use the compound-interest formula to find the account balance A, where P is principal, r is interest rate, n is number of compounding periods per year, t is time, in years, and A is account balance. P compounded t r 1 $53,530 9-% 2 Quarterly C The account balance is approximately $ (Simplify your answer. Type an integer or decimal rounded to two decimal places as needed.) 1

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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