Question

Alan put $19,000 in an investment that is compounded monthly at a rate of 0.6%. The investment is over a 7-year period. What is the setup of the formula to find Alan's total investment? Use the formula: A = P 1227 A = 18,000 0.06 12 12 X 7 A = 19,000 006 12 OOOO 24 A = 19,000 (1+ 0.006 24 12*7 0.06 A = 10.000 (1 + 12

Answer 1

1) Gathering the data

P = 19,000

rate = 0.6% or 0.006

Period : 7 years

A =?

2) Let's plug into the formula below:

`\begin{gathered} A=P(1\text{ +}(r)/(n))^(nt) \\ A=19,000(1+(0.006)/(12))^(12*7) \\ \\ A=19,000(1.0005)^(84) \\ A=19814.78 \end{gathered}`

3) So the answer is:

`A=19,000(1+(0.006)/(12))^(12*7)`