Question

Find the total amount on $12,400 principal compounded monthly at 8% interest after 46 years, 8 485,647.99

Answer 1

$485,647.99

Explanation:

Definition:

The notion of compound interest refers to the benefit (or cost) of the principal capital at an interest rate for a certain period of time, in which the interest earned at the end of each period is not withdrawn, but added to the principal capital . Therefore, interest is reinvested.

Formula:

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

Variables:

A = total amount

P = principal or amount of money deposited,

r = annual interest rate

n = number of times compounded per year

t = time in years

Data:

P=$12400 , r=8% , n=12 and t=46 years

Calculation:

`A=12,400(1+(0.08)/(12) )^(12*46)`

`A=12,400 * 1.006666666666666667^(552)`

`A=12,400 * 39.16516018`

A = $485,647.99

Hope this helps!