Question

How much would $300 invested at 4% interest compounded monthly be worth after 8 years? Round your answer to the nearest cent.

Equation: A(t)=P(1+r/n)^nt

Answer 1

You are given an initial investment of $300 at 4% interest compounded monthly after 8 years. The solution to this question is shown below.

A(t) = P(1+r/n)^nt
A(8) = 300(1+0.04/12)^12(8)
A(8) = 300(1+0.04/12)^96
A(8) = 300(1.033)^96
A(8) = $412.91

Answer 2

Answer:

$412.9

Explanation:

We are given that

P=$300

r=4% =0.04

Time,t=8 years

1 year=12 month

Therefore,n=12

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

We have to find the amount after 8 years.

Substitute the values in the above formula

Then, we get

$A(8)=300(1+\frac{0.04}{12})^{12\times 8}$

$A(8)=300(1+\frac{0.04}{12})^{96}$

$A(8)=412.9$

Hence, amount after 8 years would be worth=$412.9