Question

If $240 is invested at an interest rate of 9% per year and is compounded monthly, how much will the investment be worth in 14 years? Use the compound interest formula A = P(1 + r over n)nt.

Answer 1

Explanation:

Since you have the formula it's just plugging in. If you'd like to know why the formula works let me know and i can give an explanation, or at least link a video.

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

P is the starting money, r is the interest rate in decimal form, n is the number of times per year compounded and t is number of years.

P = 240

r = .09

n = 12

t = 14

A = 240(1+(.09/12)^(12*14)

A = 240(1 + .0075)^168

A = 240(1.0075)^168

A = 240*3.5089

A = 842.136

So you wind up with $842.14