Question

Cory invests $4000 at 3.5%. How much will he have in 6 years if the interest is compounded monthly ?

Answer 1

$ 4933.2 ( approx )

Explanation:

∵ Future value formula is,

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

Where,

P = principal amount,

r = annual rate,

n = number of periods,

t = number of years,

Given,

P = $ 4,000, r = 3.5 % = 0.035, t = 6 years n = 12 ( number of months in 1 year = 12 ),

Hence, the future value would be,

`A=4000(1+(0.035)/(12))^(72)=4933.20414683\approx \$ 4933.2`