Question

If P=2500, r=6%, and m=12, find the accumulated amount after 5 years. Use the formul: A=P(1+i)^n

Answer 1

$3372.13

Step-by-step explanation:

Given that:

• Principal, P=2500

,

• Interest Rate, r=6%

,

• Number of months, m=12

For an interest compounded m times in a year, we use the formula

`A=P(1+(r)/(m))^(mn)\text{ , n=number of years}`

When n=5 years, we have:

`\begin{gathered} A=2500(1+(0.06)/(12))^(12*5) \\ =2500(1+0.005)^(60) \\ =2500(1.005)^(60) \\ =3372.13 \end{gathered}`

The accumulated amount after 5 years is $3372.13