What is the final value of a $23,000 investment earning 4% interest after 3 months?

2 Answers
Jan 3, 2018

#$25871.87#

Explanation:

I assume you mean compound interest acquired monthly.

#A= A_0 ( 1 + r/100)^t #

  • Under the assumption that you earn 4% each month...

#=> $23000*1.04^3#

#=>$ 25871.872# which would round to #color(red)($25871.87#

Jan 3, 2018

#$23,226.63#

Explanation:

Interest is assumed to be per year unless specifically stated as otherwise. Assuming monthly compounding of interest #4%# per annum is equivalent to:
#root(12)(1.04)-1=0.0032737397822=0.327...%# per month.

Final value after #3# monthly periods at this rate would be:
#color(white)("XXX")$23,000xx(1+0.00327...)^3=$23226.63#