Question
Dan deposited
$4000
into an account with
4.8%
interest, compounded monthly. Assuming that no withdrawals are made, how much will he have in the account after
9
years?
I was just wondering of the formula for this problem, because I am not able to find it in my book.
$4000
into an account with
4.8%
interest, compounded monthly. Assuming that no withdrawals are made, how much will he have in the account after
9
years?
I was just wondering of the formula for this problem, because I am not able to find it in my book.
Answers
4000(1 + .048/12)^(12*9)
I'm sure your book has the formula
A(1+r)^t
you have to adjust it if the rate is compounded more than once per year. If monthly, then n=12 times per year. Thus, the monthly interest is 1/12 the annual rate, and there are 12 times as many compounding periods:
A(1 + r/n)^(n*t)
I'm sure your book has the formula
A(1+r)^t
you have to adjust it if the rate is compounded more than once per year. If monthly, then n=12 times per year. Thus, the monthly interest is 1/12 the annual rate, and there are 12 times as many compounding periods:
A(1 + r/n)^(n*t)
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