Question

How much would $500 invested at 6% interest compounded monthly be worth after 4 years? Round your answer to the nearest cent

Answer 1

1) Compound interest formula:
$A = P(1+ \frac{r}{n}) ^{nt}$**
**A = amount, P = principal amount, r = rate, n = # of times interest is compunded every year, t = time(in years)
2) Plug numbers in
$A = (500)(1+ \frac{0.06}{12}) ^{(12)(4)}$
3) Solve
A = 635.24458054

Hope this helped! Good Luck!