Putting $20,000 at 8% annual interest & monthly getting compounded , the amount of money that jerry will after 10 years is approximately $44,040.
Given :
present value (P) = $20,000
interest rate (r) = 8%
compounding monthly (n) = 12
Time (t) = 10 years
To find : Future value after 10 years when interest monthly gets compounded
Now,
we know the formula is
future value = present value × (1 + interest rate)^years
= P × ( 1 + r / n )^ nt
inserting values in the given formula we get,
future value = $20,000 × ( 1 + 8% / 12 )^ 10 × 12
= $20,000 × ( 1 + 8 / 1200 )^ 120
= $20,000 × (1 + 0.0066)^120
= $20,000 × ( 1.0066)^120
= $20,000 × 2.2020
= $44,040
Hence the amount saved by jerry after 10 years at the annual interest of 8% when money monthly is getting compounded with $20.000 will be $44,040.
Learn more about interest getting compounded at different rates & times here
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