Question

Rodney invests $2,400 today, compounded monthly, with an annual interest rate of 6.25%. What is Rodney's investment worth in one year

Answer 1

FV= $2,554.12

Step-by-step explanation:

Giving the following information:

Rodney invests $2,400 today, compounded monthly, with an annual interest rate of 6.25%.

First, we need to calculate the monthly interest rate:

i= 0.0625/12= 0.0052

Now, using the following formula, we can determine the future value:

FV= PV*(1+i)^n

FV= 2,400*(1.0052^12)

FV= $2,554.12