Suppose that $2000 is invested at a rate of 3.6%, compounded monthly. Assuming that no withdrawals are made, find the total amount after 7 years.

Question

asked Nov 2, 2024 47.4k views

1 Answer

Kefka · Answer 1 · 2024-11-08T02:35:10+0000

Answer:

$2572.22

Explanation:

You want the value of an investment of $2000 after 7 years when it earns interest at 3.6% compounded monthly.

The formula for the account value earning compound interest is ...

A = P(1 +r/n)^(n·t)

You have P=2000, r=0.036, n=12, t=7, so the account value is ...

A = $2000(1 +0.036/12)^(12·7) ≈ $2572.22