Question

after 4 years what is a total amount of a compound interest investment of $30,000 at 2% interest compounded monthly?round to the nearest cent

Answer 1

Compound interest formula:

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

Where:

A = total amount

P = principal investment

r= interest rate in decimal form = 2/100 = 0.02

t= years

n= number of compounding periods in a year= 12

Replacing:

A = 30,000 (1+0.02/12)^4x12

A = 30,000 (1.001666667)^48

A= 32,496.45