68.5k views
3 votes
Suppose that 15000 is invested at 4.2% compounded . Find the total amount of this investment after 6 years.

User Dikesh
by
7.5k points

1 Answer

2 votes

To find the total amount of the investment after 6 years, we can use the formula for compound interest:

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

Where:

A = the total amount after 6 years

P = the principal amount (the initial investment), which is 15000 in this case

r = the annual interest rate, which is 4.2% expressed as a decimal (0.042)

n = the number of times the interest is compounded per year, which is usually 12 for monthly compounding, 4 for quarterly compounding, and 1 for annual compounding

t = the number of years, which is 6 in this case

Plugging in the values, we get:

A = 15000(1 + 0.042/1)^(1*6)

A = 15000(1.042)^6

A = 15000(1.284)

A = 19260

Therefore, the total amount of the investment after 6 years is $19,260.