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Roberto invests $500 at 9% annual

interest compounded monthly. What is the
value of his investment after 5 years?

1 Answer

3 votes

Answer:

$782.84

Explanation:

Coumpound interest formula : A=P(1+r/n)^nt

A = final amount

P = initial principal balance

r = interest rate

n = number of times interest applied per time period

t = number of time periods elapsed

Plug in: A = 500(1+.09/12)^12*5

First find in parenthesis: (1+.09/12) = 1+ 0.0075 = 1.0075

Find exponent: 12x5 = 60

Solve 500(1.0075)^60

500(1.56568102694)

782.840513471

Round: $782.84

User Amir Keshavarz
by
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