Chapter 9: Q50. (page 595)

Find the final value $$ 2500$ invested at an interest rate $2 %$ compounded monthly 10 year.

Short Answer

Expert verified

The final amount after 10 years will be $$ 3053$ .

Step by step solution

Step 1. Write the compound interest equation.

The compound interest equation is given by:

$A = P {(1 + \frac{r}{n})}^{n t}$ , where $A$ is the amount, $P$ is the principal amount, $r$ is the rate of interest, $t$ is the time.

Step 2. Substitute the values.

$$ 2500$ is invested for 10 years with a $2 %$ interest rate compounded monthly.

Substitute 2500 for $P$ , 2 for $r$ , 12 for $n$ , and 10 for $t$ into the formula $A = P {(1 + \frac{r}{n})}^{n t}$ .

role="math" localid="1647769231173" $\begin{matrix} A = P {(1 + \frac{r}{n})}^{^{n \cdot t}} \\ = 2500 \times {(1 + \frac{0.02}{12})}^{12 \times 10} \end{matrix}$

Step 3. Simplify for A.

$A$ Simplify the equation for .

$\begin{matrix} A = P {(1 + \frac{r}{n})}^{n . t} \\ = 2500 \times {(1 + \frac{0.02}{12})}^{12 \times 10} \\ = 2500 \times {(\frac{12.02}{12})}^{120} \\ = $ 3053 \end{matrix}$

Thus, the final amount after 10 years will be $$ 3053$ .

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Find the final value $$ 2500$ invested at an interest rate $2 %$ compounded monthly 10 year.

Short Answer

Step by step solution

Step 1. Write the compound interest equation.

Step 2. Substitute the values.

Step 3. Simplify for A.

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Find the final value$2500invested at an interest rate2%compounded monthly 10 year.

Short Answer

Step by step solution

Step 1. Write the compound interest equation.

Step 2. Substitute the values.

Step 3. Simplify for A.

One App. One Place for Learning.

Most popular questions from this chapter

Recommended explanations on Math Textbooks

Mechanics Maths

Statistics

Probability and Statistics

Theoretical and Mathematical Physics

Logic and Functions

Discrete Mathematics

Study anywhere. Anytime. Across all devices.

Find the final value $$ 2500$ invested at an interest rate $2 %$ compounded monthly 10 year.