Chapter 5: Q. 10 (page 324)

Find the amount that results from each investment, $300 invested at 12% compounded monthly after a period of $1 \frac{1}{2}$ years.

Short Answer

Expert verified

The answer is $358.84

Step by step solution

Step 1. Given information

The Principal investment, $P = $ 300$

The rate of interest is expressed as a decimal, $r = 12 % = \frac{12}{100} = 0.12$

The time period, $t = \frac{3}{2} y e a r s$

The investment compounded monthly, $n = 12$

Step 2. Use Compound Interest formula

The amount $A$ after $t$ years due to a principal $P$ ,at a annual rate $r$ compounded $n$ times per year,role="math" localid="1647107491353" $A = P {(1 + \frac{r}{n})}^{n t}$

Step 3. Calculation

Substitute the given values in $A = P {(1 + \frac{r}{n})}^{n t}$

$A = P {(1 + \frac{r}{n})}^{n t} A = $ 300 {(1 + \frac{0.12}{12})}^{12 \times \frac{3}{2}} A = $ 300 {(1.01)}^{18} A = $ 300 (1.196) A = $ 358.84$

The amount is $358.84

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Find the amount that results from each investment, $300 invested at 12% compounded monthly after a period of $1 \frac{1}{2}$ years.

Short Answer

Step by step solution

Step 1. Given information

Step 2. Use Compound Interest formula

Step 3. Calculation

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Find the amount that results from each investment, $300 invested at 12% compounded monthly after a period of112years.

Short Answer

Step by step solution

Step 1. Given information

Step 2. Use Compound Interest formula

Step 3. Calculation

One App. One Place for Learning.

Most popular questions from this chapter

Recommended explanations on Math Textbooks

Decision Maths

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Mechanics Maths

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Calculus

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Study anywhere. Anytime. Across all devices.

Find the amount that results from each investment, $300 invested at 12% compounded monthly after a period of $1 \frac{1}{2}$ years.