Question

Finance. Suppose that $ 3 comma 400 is invested at 4.4 % annual interest​ rate, compounded monthly. How much money will be in the account in​ (A) 4 ​months? (B) 7 ​years?]

Answer 1

Answer:

There would be $3,450.14 by the end of 4 months

There would be $4,623.78 by the end of 7 years.

Step-by-step explanation:

We are given the following in the question:

P = 3,400$

r = 4.4% = 0.044

Compounded monthly

Formula:

The compound interest is given by:

$A = p\bigg(1+\dfrac{r}{n}\bigg)^{nt}$

where A is the amount, p is the principal, r is the interest rate, t is the time in years and n is the nature of compound interest.

a) 4 months

$A = 3400\bigg(1+\dfrac{0.044}{12}\bigg)^{4}\\\\A = \ 3,450.14$

There would be $3,450.14 by the end of 4 months.

b)  7 ​years

t = 7

$A = 3400\bigg(1+\dfrac{0.044}{12}\bigg)^{84}\\\\A = \ 4,623.78$

There would be $4,623.78 by the end of 7 years.