Claudia invested $12,000 at an interest rate of 4.5% compounded monthly. In the formula A=p (1+r/n) ^nt, A is the worth of an account after t years, n is the number of times that interest is compounded, P is the initial deposit, and r is the interest rate. Approximately how much money will be in Claudia's account after 7 years?

Question

Mathematics

Maritza Russell

13 December, 13:34

Claudia invested $12,000 at an interest rate of 4.5% compounded monthly. In the formula A=p (1+r/n) ^nt, A is the worth of an account after t years, n is the number of times that interest is compounded, P is the initial deposit, and r is the interest rate. Approximately how much money will be in Claudia's account after 7 years?

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Answers (1)

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Katie Pittman · Answer 1

Answer: $16,433.42

Step-by-step explanation:

Hi, to answer this question we have to apply the formula given:

A=p (1+r/n) ^nt,

r must be in decimal form (percentage divided by 100) n is equal to 12 (it compounds 12 times per year)

Replacing with the values given:

A = 12,000 (1 + 0.045/12) ^12 (7)

Solving:

A = 12,000 (1 + 0.045/12) ^12 (7)

A = 12,000 (1.00375) ^84

A = $16,433.42