Alexander deposit $300 every month for 18 months as recurring deposit at a rate of 12% per annum the amount he gets back as principal amount is
Answers
Given :- Alexander deposit $300 every month for 18 months as recurring deposit at a rate of 12% per annum the amount he gets back as principal amount is ?
Solution :-
we know that, Annuity Formula :-
- A = P{(1 + r/k)^(N•k) - 1} / (r/k)
- A is the balance in the account after N years.
- P is the regular deposit (the amount you deposit each year, each month, etc.)
- r is the annual interest rate in decimal form.
- k is the number of compounding periods in one year.
we have :-
- P = $300
- r = (12/100) = (0.12)
- N = 18 months = (18/12) = 1.5 years.
- k = 12 .
- A = Total amount deposited .
Putting all values we get,
→ A = 300•[{1 + (0.12/12)}^(12*1.5) - 1] / (0.12/12)
→ A = 300•[(1 + 0.01)¹⁸ - 1] / (0.01)
→ A = 30000[(1.01)¹⁸ - 1]
→ A = 30000[1.196 - 1]
→ A = 30000 * 0.196
→ A ≈ $35,790 (Ans.)
Hence, the principal amount is $35,790 .
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Answer:
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