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BigorU [14]
4 years ago
14

In an investment account what if $2000 is invested. What is the value after 3 years if compounded monthly by 6% ?

Mathematics
1 answer:
OleMash [197]4 years ago
3 0
<span>
Compound interest formula  A = P(1 +r/100)^n
A = Amount
r = rate = 6
n = number of compounding time.
P = Principal = $2000.
Since we are compounding monthly, r = 6% p.a = (6/12)% per month.
n= 3 years = 3*12 = 36 months.
Note that  since we are compounding monthly, our time would be in months.
A = P(1 +r/100)^n
A = 2000 * (1 + (6/12)/100 )^36
A = 2000 * (1 +  6/1200)^36
</span><span>A = 2000 * (1 +  0.005)^36    Use your calculator</span>
<span> <span>A = 2000 * (1 .005)^36</span> = 2393.36
Amount = $2 393.36</span>
That's it. Cheers.

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