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steposvetlana [31]
3 years ago
6

109. Dani has $1,000 in an investment account that earns 3% per year, compounded monthly.

Mathematics
1 answer:
xenn [34]3 years ago
4 0

Answer:

Vf = Vi*(1 + 0.00247n)

Step-by-step explanation:

The interest rate can be converted from anual to monthly by the equation:

(1 + im)¹² = 1 + iy, where im is the interest rate per monthly and iy the interest rate per year:

(1 + im)¹² = 1 + 0.03

1+ im = 1.03^{1/12}

1+ im = 1.00247

im = 0.00247 = 0.247%

The final amount (Vf) can be calculated knowing the initial amount (Vi):

Vf = Vi*(1 + im*n), where n is the number of monthes:

Vf = Vi*(1 + 0.00247n)

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4 years ago
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