Please help me with this. I am really struggling...
1 answer:
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Compound interest with addition formula:
where,
A = final amount
P = initial principal balance
r = interest rate
n = number of times interest applied per time period
t = number of time periods elapsed
PMT = Regular contributions (additional money added to investment)
in this example
P = 2500
r = 8% = 0.08
n = 4
t = 5 years
PMT = 2500
solving for A:
Therefore, his investment after 5 years will be
$189,408.29