Question

How much would $200 invested at 5% interest compounded monthly be worth after 9 years? Round your answer to the nearest cent.

Answer 1

A = P (1 + r/n)^nt

=200(1 + 0.05/12)^12(9)

=313.37

Answer 2

Answer:

The amount becomes 31450 cents.

Step-by-step explanation:

Formula for compounded monthly

$Amount = P(1 + \frac{r}{12} )^{12t}$

Where P is the principle, r is the rate ofinterest in the decimal form and t is the time in years.

As given

$200 invested at 5% interest compounded monthly for 9 years.

P = $200

5% is written in the decimal form

$= \frac{5}{100}$

= 0.05

r = 0.05

t = 9 years

Put in the formula

$Amount = 200(1 + \frac{0.05}{12} )^{12\times 9}$

$Amount = 200(1 + 0.0042)^{12\times 9}$

$Amount = 200(1.0042)^{108}$

$Amount = 200\times 1.5725\ (Approx)$

Amount = $ 314.5 (Approx)

As 1 dollar = 100 cents

Now convert $ 314.5 into cent.

$ 314.5  = 314.5 × 100

             = 31450 cents

Therefore the amount becomes 31450 cents.