Question

The relative growth rate for a certain type of mutual fund is 15% per year. An account is opened with a balance of $3,000. How much is the mutual fund worth in 5 years? In your final answer, include all of your calculations.

Answer 1

A=3,000×(1+0.15)^(5)
A=6,034.07

Answer 2

$6.034,07

Explanation:

To resolve this exercise, you need to apply the compound interest formula (interest on capital + accrued interest).

M = C (1 + i) ^ n

at where:

M = Amount

i = interest rate = 15% = 0.15

C = capital = $ 3000

n = number of months = 5

Applying the data in the formula:

M = 3,000 × (1 + 0.15) ^ (5)

M = $ 6,034.07

Therefore, in five months the value of the fund will be $ 6,034.07.