Question

Suppose you invested $1500 in an ac count that paid an annual of 3% compound monthly. How much would you have after 1 year?

Answer 1

Answer:

1545.62

Step-by-step explanation:

The calculation of compound interests uses this formula:

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

Where  A = total amount, P = principal or amount of money deposited, r = annual interest rate, n = number of times compounded per year  and t = time in years.

So, if we plug-in the numbers of the problem we have:

$A = 1500 (1 + \frac{0.03}{12} )^{12*1}$

Which gives us:

$A = 1500 * 1.0025^{12} = 1500 * 1.030416 = 1545.62$

For a grand total of 1,545.62 including capital and interests.