Question

How much money is earned by investing $10,000 for 5 years and 3 months at 3 1/5% annual interest, compounded monthly?

(I know how to do this but how do you put "5 years and 3 months" into a formula and how do you add it up to make 525?)

^^^^^^^^^

Answer 1

Answer:

$\ 11,826.72$

Step-by-step explanation:

we know that    

The compound interest formula is equal to  

$A=P(1+\frac{r}{n})^{nt}$  

where  

A is the Final Investment Value  

P is the Principal amount of money to be invested  

r is the rate of interest  in decimal

t is Number of Time Periods  

n is the number of times interest is compounded per year

in this problem we have  

$P=\ 10,000\\n=12$  

$t=5\ years\ 3\ months=5+\frac{3}{12}=5.25\ years$

$r=3\frac{1}{5}\%=(3+\frac{1}{5})\%=3.2\%=3.2/100=0.032$

substitute in the formula above  

$A=10,000(1+\frac{0.032}{12})^{12*5.25}$  

$A=10,000(\frac{12.032}{12})^{63}$  

$A=\ 11,826.72$  

Answer 2

Answer:

Actually, The top answer is wrong... The answer would be $1,826.72 ( Sorry...not trying to be rude or anything)

Step-by-step explanation: I know this because it's a gradpoint answer.