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?

Answer 1

FV=(240)[1+(0.09/12)]^(12*14]

=(240)[1+0.0075]^168

=(240)(3.5088855954842)

=$842.13 ( answer )

Answer 2

$842.13.

Explanation:

We have been given that $240 is invested at an interest rate of 9% per year and is compounded monthly. We are asked to find the value of investment after 14 years.

We will use compound interest formula to solve our given problem.

`A=P(1+(r)/(n))^(nT)`, where,

A = Final amount after T years,

P = Principal amount,

r = Annual interest rate in decimal form,

n = Number of times interest is compounded per year,

T = Time in years.

`r=9\%=(9)/(100)=0.09`

`A=\$240(1+(0.09)/(12))^(12*14)`

`A=\$240(1+0.0075)^(168)`

`A=\$240(1.0075)^(168)`

`A=\$240*3.508885595`

`A=\$842.1325428`

`A\approx \$842.13`

Therefore, the investment will be worth $842.13 in 14 years.