Question

How much would $500 invested at 6% interest compounded monthly be worth after years, A(t)=P(1+rn)nt?

Answer 1

Answer:

A(t)=500×1.005

12t after t years.

Explanation:

Here, we have been given Principal amount invested P , r rate of interest per annum and n

tells us how frequently (at regular intervals) interest is compounded in a year. This gives amount at the end of

t tears as A(t)=P(1+rn)nt .

Here P=$500 , r=6%=0.06 , n=12

(as it is compounded every month), hence

A(t)=500(1+0.0612)12t=500×1.00512t