Question

John deposited $2860 in a bank that pays 9% interest, compounded monthly. Find the amount he will have at the end of 3 years.

a.
$3742.73
c.
$8044.22
b.
$3128.29
d.
$3632.20

Answer 1

Hi there :)

The formula is
A=p (1+r/k)^kt
A future value?
P present value 2860
R interest rate 0.09
K compounded monthly 12
T time 3 years

A=2,860×(1+0.09÷12)^(12×3)
A=3,742.73

Hope it helps

Answer 2

Option a - $3742.73

Explanation:

Given : John deposited $2860 in a bank that pays 9% interest, compounded monthly.

To find : The amount he will have at the end of 3 years ?

Solution :

Using compound interest formula,

`A=P(1+r)^t`

Where, A is the amount

P is the principle P=2860

r is the rate r=9%=0.09

t is the time t= 3 years

Compounded monthly,

`r=(r)/(12)=(0.09)/(12)=0.0075`

`t=t* 12=3* 12=36`

Substitute the value,

`A=P(1+r)^t`

`A=(2860)(1+0.0075)^36`

`A=2860* 1.3086`

`A=3742.725`

Therefore, Option a is correct.

The amount he will have at the end of 3 years is $3742.73