Question

1) $38,000 at 9% compounded monthly for 7 years

Answer 1

Note: Consider we need to find the amount.

Given:

Principal = $38000

Rate of interest = 9% compounded monthly

Time = 7 years

To find:

The amount after 7 years.

Solution:

Formula for amount:

$A=P\left(1+\dfrac{r}{n}\right)^{nt}$

Where, P is principal, r is the rate of interest in decimal, n is the number of times interest compounded in an year and t is the number of years.

The interest is compounded monthly, so n=12.

Putting $P=38000, r=0.09,n=12, t=7$ in the above formula, we get

$A=38000\left(1+\dfrac{0.09}{12}\right)^{12(7)}$

$A=38000\left(1+0.0075\right)^{84}$

$A=38000\left(1.0075\right)^{84}$

$A\approx 71181.67$

Therefore, the amount after 7 years is $71181.67.