Complete question :
Solve the compound interest problem. $3425 is invested at %7.5 compounded monthly for 2 years. a. Find the overall amount. b. Find the compound interest.
Answer:
$3977.425 ; $552.425
Explanation:
Given that:
Principal (P) = $3425
Rate (r) = 7.5% = 0.075
Time(t) = 2 years
A = p(1 + r/n)^nt
r = rate
n = number of times compounded per year
t = time in years
A = final amount
A = 3425(1 + 0.075/12)^12*2
A = 3425(1 + 0.00625)^24
A = 3425(1.00625)^24
A = 3425(1.1612920)
A = $3977.4251
Hence, overall amount = $3977.425
Compound interest = $(3977.425 - 3425) = $552.425