Question

Suppose you invested $1500 in an ac count that paid an annual of 3% compound monthly. How much would you have after 1 year

Answer 1

1545.62

Explanation:

The calculation of compound interests uses this formula:

`A = P (1 + (r)/(n) )^(n*t)`

Where A = total amount, P = principal or amount of money deposited, r = annual interest rate, n = number of times compounded per year and t = time in years.

So, if we plug-in the numbers of the problem we have:

`A = 1500 (1 + (0.03)/(12) )^(12*1)`

Which gives us:

`A = 1500 * 1.0025^(12) = 1500 * 1.030416 = 1545.62`

For a grand total of 1,545.62 including capital and interests.