Question

How much wood $400 be worth after 11 years if it were invested at 4% interest compounded monthly? (Use the formula below and round your answer to the nearest cent.) A(t)=P(1+r/n)^nt

Answer 1

Here we are given the formula for compound interest as :

$A=P(1+\frac{r}{n})^{nt}$

Here

A= Amount

P=Principal

r=rate of interest

n=number of times interest is compounded per year

t=time(years)

So we are given

P= $400

r=4% or 0.04

t= 11 years

n= 12

Plugging these values in the formula for compound interest we have,

$A=400(1+\frac{0.04}{12})^{12*11}$

A= $620.6286

Amount = $620.6

Answer: The final amount after 11 years will be $620.6 .