Question

How much money will you have in 6 months if you invest $1000 at 3% compounded monthly?

Answer 1

The total amount accrued, principal plus interest, with compound interest on a principal of $1,000.00 at a rate of 3% per year compounded 12 times per year over 0.5 years is $1,015.09.

Compound Interest

Given Data

• Principal = $1000

• Rate = 3%

• Time = 6 months = 0.5 years

First, convert R as a percent to r as a decimal

r = R/100

r = 3/100

r = 0.03 rate per year,

Then solve the equation for A

A = P(1 + r/n)^nt

A = 1,000.00(1 + 0.03/12)^(12)(0.5)

A = 1,000.00(1 + 0.0025)^(6)

A = $1,015.09

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