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

2 Answers
Jan 3, 2018

$25871.87$25871.87

Explanation:

I assume you mean compound interest acquired monthly.

A= A_0 ( 1 + r/100)^t A=A0(1+r100)t

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

=> $23000*1.04^3$230001.043

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

Jan 3, 2018

$23,226.63$23,226.63

Explanation:

Interest is assumed to be per year unless specifically stated as otherwise. Assuming monthly compounding of interest 4%4% per annum is equivalent to:
root(12)(1.04)-1=0.0032737397822=0.327...%121.041=0.0032737397822=0.327...% per month.

Final value after 33 monthly periods at this rate would be:
color(white)("XXX")$23,000xx(1+0.00327...)^3=$23226.63XXX$23,000×(1+0.00327...)3=$23226.63