Question

If you invest $3,000 in an investment account paying 3% interest compounded weekly, how much will the account be worth in 10 years

Answer 1

Answer:

$4049.23

Explanation:

Data provided in the question:

Principle amount = $3,000

Interest rate = 3% compounded monthly = 0.03

Time = 10 years

Now,

Number of compounding periods in a year = 52  [as 1 year have 52 weeks ]

Using the formula of compounding

Future value = Principle × $[1 + \frac{r}{n}]^{n\times t}$

Here,

r is the interest rate

n is the number of compounding periods

t is the time in years

Therefore,

Future value = $3,000 × $[1 + \frac{0.03}{52}]^{52\times 10}$

or

Future value = $3,000 × 1.3497

or

Future value = $4049.23