Question

What is the future value if $12,000.00 is invested for 2 years at 9% compounded monthly?The future value is $. (Round to 2 decimal places.)

Answer 1

Future value (A) with compounded interest:

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

P is the principal amount

r is the interest rate in decimals

n is the number of times the interest in compounded in a year

t is the time in years

For the given situation:

`\begin{gathered} P=12,000.00 \\ r=(9)/(100)=0.09 \\ n=12 \\ t=2 \\ \\ A=12,000.00(1+(0.09)/(12))^(12\cdot2) \\ \\ A=12,000.00(1.0075)^(24) \\ \\ A=14,356.96 \end{gathered}`

Then, the final value is $14,356.96