Question

You want to buy a new equipment in 5 years, when you think prices will have gone down to a more reasonable level. you have saved $3,000. if you can invest your money at 10% compounded monthly, how much would you have 5 years later?

Answer 1

To calculate how much you would have 5 years later, we can use the compound interest formula. Invest $3,000 at 10% compounded monthly and you would have approximately $4,634.80 after 5 years.

Step-by-step explanation:

To calculate how much you would have 5 years later, we can use the compound interest formula:

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

In this case, P = $3,000, r = 10% or 0.1, n = 12 (since interest is compounded monthly), and t = 5 (years).

Plugging in these values, we get:

A = 3000(1 + 0.1/12)^(12*5)

A = $4,634.80

Therefore, you would have approximately $4,634.80 after 5 years if you invest your $3,000 at 10% compounded monthly.