Question

How much would $200 interest compounded monthly be worth after 30 years

Answer 1

Given:

Principal (P)=$200

Rate of interest (r) =4%

time (t)=30 years

Number of times compounded per year(n) = 12

Required- the amount.

Explanation:

First, we change the rate of interest in decimal by removing the "%" sign and dividing by 100 as:

$\begin{gathered} r=4\% \\ \\ =\frac{4}{100} \\ \\ =0.04 \end{gathered}$

Now, the formula for finding the amount is:

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

Put the given values in the formula, we get:

$A=200(1+\frac{0.04}{12})^{12\times30}$

Solving further, we get:

$undefined$