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What is the accumulated value of the money is compounded monthly?

What is the accumulated value of the money is compounded monthly?-example-1

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Given: An investment of $20000 for 6 years at 5.5%.

Required: To determine the accumulated value of the money is compounded monthly.

Step-by-step explanation: The formula for compound interest is-


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

where n is the number of times, interest is compounded in a year. Here we have-


\begin{gathered} P=20000 \\ n=12 \\ t=6 \\ r=0.055 \end{gathered}

Substituting the values into the formula as-


A=20000(1+(0.055)/(12))^(12*6)

Further solving-


A=\text{\$}27,798.40

Final Answer: The accumulated value of the money is $27,798.40

User HenryTK
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