Answer:
584.03
Step-by-step explanation:
Given that principal amount = 500.20 dollars
Interest rate = 3 7/8% p.a.= 3100/8(12) per month
Period = 4 years = 4(12) = 48 months.
A= P(1+r/n)^nt
Here n = 12 t = 4 years.
Substitute to get
Future value = [tex]500.20(1+\frac{32}{8(1200)} )^{48}[/tex]
=584.03
Answer:
$583.92
Step-by-step explanation:
For future value use the formula
[tex]A=P\cdot \left(1+\dfrac{r}{n}\right)^{nt},[/tex]
where A is future value, P is initial value, n is number of times interest is compounded per year, r is interest rate (as decimal) and t is time (in years).
In your case,
P=$500.20,
r=0.03875 (because 3 7/8%=3.875%),
t=4,
n=12.
Therefore,
[tex]A=500.20\cdot \left(1+\dfrac{0.03875}{12}\right)^{12\cdot 4}=500.20(1.00323)^{48}\approx \$583.92.[/tex]
