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

1 Answer
Dec 29, 2016

Answer:

#A(t)=500xx1.005^(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+r/n)^(nt)#.

Here #P=$500#, #r=6%=0.06#, #n=12# (as it is compounded every month), hence

#A(t)=500(1+0.06/12)^(12t)=500xx1.005^(12t)#