If Maggie invests $16,250 at a rate of 4.9%, compounded monthly, find the value of the investment after 7 years. Include your calculations in your final answer.
Mathematics · High School · Tue Nov 03 2020
Answered on
Given:
Principal Amount ( P ) = $16250
Interes Rate ( r ) = 4.9% or 0.049( divide by 100)
Term ( t ) = 7
Compounded monthly( n ) = 12
Formula for Compound Interest:
A = P ( 1 + r/n)^nt
A = Future value
Solution:
Substitute the given values of P, r, n and t to the formula for the compound interest.
A = $16250 ( 1 + 0.049/12)^(7)(12)
A = $16250 ( 1.004083333)^(84)
A = $16250 ( 1.408184955 )
A = $22,883
Final answer:
A = $22,883