Question

Imran deposited 3000 per month (at the start of month) into a saving account for 10 months. If the bank offer 6% interest compounded monthly , the total amount imran would have saved at the end of three year would be.

Answer 1

3.590.04

Explanation:

The formula given for total amount saved when compounding interest =

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

Where

A = Total amount saved after t years

P = Principal or initial amount saved

r = Interest rate

n = compounding frequency

t = time in years

From the above question

P = 3000

r =6% = 0.06

n =compounded monthly = 12

t = 3 years

Hence,

A = 3000(1 + 0.06/12)^3 × 12

A = 3000(1 + 0.06/12)^36

A = 3,590.04

Therefore, the total amount Imran will have in his account after 3 years = 3,590.04