Question

Septima invests $3,000 in an account with an annual interest rate of 5.2% compounded monthly for 3 years.What is the return on investment for Septima's account?16.8%1.3%14.4%5.3%

Answer 1

Given:

Principal, P=$3000

Interest rate, r=0.052

Years, t=3 years

To find the return amount is compounded monthly:

Using the formula,

`\begin{gathered} A=P(1+(r)/(12))^(12t)_{} \\ =3000(1+(0.052)/(12))^(12*3) \\ =3000(1+0.00433)^(36) \\ =3505.30 \end{gathered}`

Hence, the return amount on investment is $3505.30.

In percentage,

The return on investment is,

`\begin{gathered} (3505.3)/(3000)*100=16.84 \\ \approx16.8\text{ \%} \end{gathered}`

Hence, the answer is 16.8%.