Question

If $240 is invested at an interest rate of 9% per year and is compounded monthly, how much will the investment be worth in 14 years?

$68.39
$704.28
$842.13
$846.10

Answer 1

it is 842.13.............................

Answer 2

Option
`\$842.13`

Explanation:

we know that

The compound interest formula is equal to

`A=P(1+(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

`t=14\ years\\ P=\$240\\ r=0.09\\n=12`

substitute in the formula above

`A=\$240(1+(0.09)/(12))^(12*14)=\$842.13`