How much would $500 invested at 6% interest compounded monthly be worth after 5 years? round your answer to the nearest cent.

2 answers:

8 0

Use this formula: A = P(1 + r/n)^nt, where A is the amount after interest (what you are solving for), P is the amount you invested originally, r is the rate at which it was invested in decimal form, n is the number of times the compounding occurs each year, t is the time in years it is invested. It would look like this: A = 500(1 + [.06/12])^12*5. Do inside the parenthesis first to get 1 + .005 = 1.005. Now raise that to the 60th power (12 times 5 is 60) to get 1.34558. Now multiply that by the 500 out front to get a total amount of $674.43

GenaCL600 [577]3 years ago

5 0

Answer- $674.43

Step-by-step explanation:

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Answer:

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Step-by-step explanation:

To solve this question, we need to understand the normal probability distribution and the central limit theorem.

Normal probability distribution

Problems of normally distributed samples are solved using the z-score formula.

In a set with mean $\mu$ and standard deviation $\sigma$ , the zscore of a measure X is given by:

$Z = \frac{X - \mu}{\sigma}$

The Z-score measures how many standard deviations the measure is from the mean. After finding the Z-score, we look at the z-score table and find the p-value associated with this z-score. This p-value is the probability that the value of the measure is smaller than X, that is, the percentile of X. Subtracting 1 by the pvalue, we get the probability that the value of the measure is greater than X.

Central Limit Theorem

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