How much would $300 invested at 4% interest compounded monthly be worth after 8 years? Round your answer to the nearest cent.
here's the equation: A(t)=P(1+r/n)^nt
i just don't know what to put where please help

- anonymous

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- anonymous

@Hero @mathstudent55

- Hero

What I mean to ask is, what do you think each variable in the formula means?

- Hero

Obviously t is in years, so 8 = t. You probably know that much at least.

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## More answers

- anonymous

is it a(8)=300(1+.06/1)^8 ??

- anonymous

@Hero

- Hero

The 300 and the 8 is correct.

- anonymous

is that is?

- anonymous

it?*

- Hero

There's more to it of course.

- Hero

Okay, so the P is for the principal, which you figured out is $300.
The r is the interest rate which is 4% or .04.
And the n represents number of times compounded. You figure that out by multiply 8 years times 12 months per year. So n = 96.

- anonymous

so 8=300(1+.04/1)^96?

- Hero

Where do you get the "1" underneath the fraction? Isn't that supposed to be "n". What did we say n equals?

- Hero

Actually, n = 12, not 96

- anonymous

oh oops. 8=300(1+.04/12)^96 ?

- Hero

So n represents number of times compounded per year which is 12.
So A(8) = 300(1.04/12)^{96} is correct.

- anonymous

is it 1.04 for the numerator? or 1+ .04/12?

- Hero

Actually you have it right it's 1 + .04/12

- Hero

I admit, I'm a little distracted atm. Not fully paying attention.

- anonymous

okay. how do i solve it?

- Hero

At this point, it's just plug and play if you have the right calculator you should be able to calculate A(8).

- anonymous

am i solving for a?

- Hero

You're finding A(8). Everything on the right side of the equation only has to be calculated.

- anonymous

\[A(8)=300(1+\frac{ .04 }{ 12 })^96\]

- anonymous

like this? i tried to put the 6 up next to the 9 but it didn't work

- anonymous

@Hero

- Hero

Use brackets

- Hero

\(A(8)=300\left(1+\dfrac{ .04 }{ 12 }\right)^{96}\)

- anonymous

i keep getting 51.61

- anonymous

the answer choices are
a) $412.92
b) $410.57
c) $308.10
d) $484.25

- anonymous

do you get 51.61?

- anonymous

@Hero

- Hero

Hang on

- Hero

I get 412.918...

- anonymous

oh! okay. i see how you got that. thank you!!

- Hero

You're Welcome bro.

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