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3 January, 17:37

John deposited $2,860 in a bank that pays 9% interests, compounded monthly. Find the amount he will have at the end of 3 years?

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Answers (2)
  1. 3 January, 17:48
    0
    The amount he will have at the end of 3 years = $3742

    Step-by-step explanation:

    Formula for compound interest

    A = P[1 + R/n]^nt

    A - Amount

    P - Principle amount

    R - rate of interest

    n - Number of times in which the amount compounded

    t - Number of years

    To find the amount

    Here,

    P = $2,860, R = 9% = 0.09

    n = 12 and t = 3 years

    A = P[1 + R/n]^nt

    =2860[1 + 0.09/12]^ (12*3)

    = 2860[1 + 0.0075]^36 = 3742.7257 ≈ $3742
  2. 3 January, 18:06
    0
    The amount he will have at the end of 3 years is $3742.73

    Step-by-step explanation:

    * The formula for annual compound interest is:

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

    Where:

    A = Total money after t years

    P = the investment amount (the initial deposited amount)

    r = the annual interest rate (decimal)

    n = the number of times that interest is compounded per year

    t = the number of years the money is invested

    ∵ P = $2860 ⇒ deposited

    ∵ r = 9% = 9/100 = 0.09 ⇒ annual rate

    ∵ n = 12 ⇒ compounded monthly

    ∵ t = 3 years

    ∴ A = 2860 (1 + 0.09/12) ^ (12 * 3)

    ∴ A = 2860 (1.0075) ^36 = $3742.73

    * The amount he will have at the end of 3 years is $3742.73
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