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9 February, 21:27

Dave has 8000 to invest for 15 years. He finds a bank that offers an interest rate of 3.1% compounded monthly. How much money will he have after 15 years?

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  1. 10 February, 00:44
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    Answer: he will have $12720 after 15 years

    Step-by-step explanation:

    We would apply the formula for determining compound interest which is expressed as

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

    Where

    A = total amount in the account at the end of t years

    r represents the interest rate.

    n represents the periodic interval at which it was compounded.

    P represents the principal or initial amount deposited

    From the information given,

    P = $8000

    r = 3.1% = 3.1/100 = 0.031

    n = 12 because it was compounded 12 times in a year.

    t = 15 years

    Therefore,

    A = 8000 (1 + 0.031/12) ^12 * 15

    A = 8000 (1 + 0.00258) ^180

    A = 8000 (1.00258) ^180

    A = $12720
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