Asked by helpidkwhatimdoingwrong

P= $12,000, r=5, t=10 1/2 (which I then converted into 21/2), compounded monthly

According to my textbook the formula
is A= P(1+r/m) t*m

Since it is monthly, m=12

I set up my equation as 12,000 (1+0.05/4)^42 (I got 42 by multiplying 21/2 by 4) and got 12,000 I checked my answer and the correct answer is actually $20,219.60 according to my textbook. What did I do wrong?
Answered by helpidkwhatimdoingwrong
Oh wait. I did the equation in the wrong order. I am supposed to start with 1+0.05/4 then the answer^42 then multiply that by 12,000. Nevermind. Foolish mistake.
Answered by henry2,
Given: Po = $12,000, APR = 5%, T = 10.5 years-

P = Po(1+r)^n.
r = 0.05/12 = 0.004166 = Monthly % rate.
n = 12Comp./yr, * 10.5yrs. = 126 compounding periods.
P = 12.000(1.004166)^126 = $20,261.70.

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