Question

The compound interest formula states that if P dollars are invested at an annual interest rate of r, compounded n times per year, then A, the amount of money presentIf $10.500 is invested at 8 % compounded monthly, how much will this investment be worth in 22 years? Round youranswer to two decimal placesafter tyears, is given by A = P(1+2)

Answer 1

Step 1

State the compound interest formula

`A=P(1+(r)/(n))^(t* n)`

where;

`\begin{gathered} P=10500 \\ r=(8)/(100)=0.08 \\ t=22 \\ n=12 \end{gathered}`

Step 2

Find the amount after 22 years

`A=10500(1+(0.08)/(12))^(12*22)`
`\begin{gathered} A=10500*5.778587511 \\ A=\text{ \$60675.16887} \\ A\approx\text{ \$60675.17} \end{gathered}`

Answer;

`\text{ \$60675.17}`