anonymous
  • anonymous
You deposit $2000 in an account earning 3% interest compounded monthly. a. How much will you have in the account in 20 years? b. How much interest will you earn?
Mathematics
jamiebookeater
  • jamiebookeater
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SolomonZelman
  • SolomonZelman
Hello! lets apply the same formula here again. except that this time you will have to tell me what to plug in for each of the variables (if you can, please do, if not, ask)/ \(\Large\color{blue}{ \displaystyle {\rm A}= {\rm P}\left(1+\frac{ {\rm r} }{ {\rm n} }\right)^{{\rm n} \times {\rm t}} }\)
SolomonZelman
  • SolomonZelman
I will tell you, that: "compounded monthly" means that it is compounded 12 times per year (so, n=12).
anonymous
  • anonymous
A=2000(1+.3/12)12*20?

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anonymous
  • anonymous
3% = 0.03 and you need an exponent symbol, but otherwise that's right. A=2000(1+.03/12)^(12*20)
anonymous
  • anonymous
then just subtract the original $2000 to get the interest
SolomonZelman
  • SolomonZelman
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SolomonZelman
  • SolomonZelman
you can use a calculator for this...
anonymous
  • anonymous
A. 3641.51 b. 1,641.51
SolomonZelman
  • SolomonZelman
have you found the value of the full investment amount after 20 years? if you have, then subtract the initial amount, subtract 2000 from this....

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