Question

Tyrion can invest in an account earning 2.5% interest compounded monthly. If he invests $5000, ow much will he have in 7 years?

Answer 1

$5925.51

Explanation:

We are going to be using the compound interest formula

Given data

principal P= $5000

N is time = 7 years

rate r= 2.5%= 0.025

compounded monthly k= 112

final amount A=?

The expression for the compound interest is

`A= P(1+(r)/(K) )^K^N`

substituting into the expression we have

`A= 5000(1+(0.025)/(12) )^1^2^*^7\\\\ A= 5000(1.002 )^1^2^*^7\\\\ A= 5000(1.002 )^8^7\\\\A= 5010*1.18273815853 \\\\ A= 5925.51`

in seven years he will have $5925.51