Question

if $2000 is invested at an annual interest rate r compunded monthly the amount in the account after 5 years is given by

Answer 1

Results are below.

Step-by-step explanation:

Giving the following information:

Initial investment (PV)= $2,000

Number of periods (n)= 5*12= 60 months

Interst rate (r)= ?

Suppose an interest rate of 8% compounded monthly.

First, we need to determine the monthly interest rate:

i= 0.08/12= 0.0067

To calculate the future value after 5 years, we need to use the following formula:

FV= PV*(1+r)^n

FV= 2,000*1.0067^60

FV= $2,985.62