John deposited $2,860 in a bank that pays 9% interests, compounded monthly. Find the amount he will have at the end of 3 years?
Accepted Solution
A:
Answer:The amount he will have at the end of 3 years is $3742.73Step-by-step explanation:* The formula for annual compound interest is:A = P (1 + r/n)^(nt)Where:A = Total money after t yearsP = the investment amount (the initial deposited amount)r = the annual interest rate (decimal)n = the number of times that interest is compounded per yeart = the number of years the money is invested ∵ P = $2860 ⇒ deposited∵ r = 9% = 9/100 = 0.09 ⇒ annual rate∵ n = 12 ⇒ compounded monthly∵ t = 3 years∴ A = 2860(1 + 0.09/12)^(12 × 3)∴ A = 2860(1.0075)^36 = $3742.73* The amount he will have at the end of 3 years is $3742.73