Question

How much would $300 invested at 4% interest compounded monthly be worth after 8 years? Round your answer to the nearest cent.

here's the equation: A(t)=P(1+r/n)^nt

i just don't know what to put where please help,

Answer 1

The equation you have provided is correct:

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

Where P = principal amount

r = interest rate

n = number of times the amount is compounded in a year

t = time in years

The value of n is 12 since it is compounded monthly.

Substituting the amount to the formula:

A(t) = $300 ( 1 + 4%/12)^(12)(8)

A(t) = $300 (1 + 0.003333)^96

A(t) = $300 (1.376351)

A(t) = $412.91