GP Question (1 Viewer)

[frenzal_dude]

Sally decides to put $100 per week into her superannuation fund. The interest rate quoted is 8% per annum, compounded weekly.

Which expression will calculate the future value of her superannuation at the end of 35 years?

 

[frenzal_dude]

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[frenzal_dude]

When I worked it out, none of these provided the right answer.

I worked out that tn = 100 + 100(0.08/52) + 100(0.08/52)^2 + ...... + 100(0.08/52)^(n-1)

So tn = Sn = a(1-r^n)/(1-r)

52 weeks x 35 years = 1820 weeks

S1820 = 100(1-(0.08/52)^1820)/(1-0.08/52)

But that isn't one of the answers.

Hope you guys can help!

 

[Drongoski]

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C) is the formula to use,

If you take 1 year = 52 weeks you have total of 1820 weeks.

But if you take 1-year to be 365 days you get 35 x 365 = 12775 days = 1825 weeks.

If you add 1 extra day every 4 years for leap years, you add 35/4 = 8.75 extra days

= 8 days or 9 days depending on which year you began i suppose. so you end up with

1826.xxx weeks. Can be quite annoying !


Hopefully this helps explain any discrepancy you may have.