Question

Cory invests $4000 at 3.5%. How much will he have in 6 years if the interest is compounded monthly ?

Answer 1

Answer:

$ 4933.2 ( approx )

Step-by-step explanation:

∵ Future value formula is,

$A=P(1+\frac{r}{n})^{nt}$

Where,

P = principal amount,

r = annual rate,

n = number of periods,

t = number of years,

Given,

P = $ 4,000, r = 3.5 % = 0.035, t = 6 years n = 12 ( number of months in 1 year = 12 ),

Hence, the future value would be,

$A=4000(1+\frac{0.035}{12})^{72}=4933.20414683\approx \ 4933.2$