anonymous
  • anonymous
Tom invests $6,000 for five years at 8% compounded monthly . How much will he have after the five years? and what is the formula for it?
Mathematics
  • Stacey Warren - Expert brainly.com
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SOLVED
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katieb
  • katieb
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anonymous
  • anonymous
Are you aware of what compounded monthly interest is?
anonymous
  • anonymous
i have no idea
anonymous
  • anonymous
There are two types of interest simple interest and compound interest, Simple interest: Interest is given but from the original amount, in this context it will always be 8% of 6000 being added Compound interest is a bit more complicated it means that first month it will be 8% of 6000 but the second month it will be 8% of whatever 6000 plus the old interest is

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anonymous
  • anonymous
So what is 8% percent
anonymous
  • anonymous
$480 right?
anonymous
  • anonymous
Correct
anonymous
  • anonymous
ok so what is next?
anonymous
  • anonymous
at the end of the first moth you will have $6480, second month is 8% of 6480, an on and on until 5 years
anonymous
  • anonymous
oh ok is there a certain formula for that?
anonymous
  • anonymous
After 5 years you will have $8,939.07
anonymous
  • anonymous
Sorry i cant remember the formula
anonymous
  • anonymous
thats alright! you helped a lot!
anonymous
  • anonymous
thanks!
anonymous
  • anonymous
Here you can use this to work it out for now, ill try to remember http://www.moneychimp.com/calculator/compound_interest_calculator.htm
anonymous
  • anonymous
oh wait i might have found it!
anonymous
  • anonymous
M = P( 1 + i )n M is the final amount including the principal. P is the principal amount. i is the rate of interest per year. n is the number of years invested.
anonymous
  • anonymous
\[A=p(1+r/n)^{nt}\]
anonymous
  • anonymous
6000x(1+12)x5= Answer
anonymous
  • anonymous
as your doing it mothly so 12 times an year
anonymous
  • anonymous
monthly*
anonymous
  • anonymous
ok thanks
anonymous
  • anonymous
If i was helpful a medal would be appreciated
anonymous
  • anonymous
Thank You
anonymous
  • anonymous
no, thank you!
anonymous
  • anonymous
Any other help just @SchoolSlacker me
anonymous
  • anonymous
sure thing :)

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