Question

How much would $300 invested at 4% interest compounded monthly beworth after 8 years? Round your answer to the nearest cent.A10) = P(1+)

Answer 1

We know that

• The principal is $300.

,

• The interest rate is 4%.

,

• The compounding period is monthly.

,

• The time is 8 years.

We have to use the compound interest formula

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

Where P = 300, r = 0.04, n = 12, t = 8. Using these values, we have the following

`\begin{gathered} A=300(1+(0.04)/(12))^(12\cdot8)=300(1+0.003)^(96) \\ A\approx400 \end{gathered}`

Hence, the amount we will get is $400.