SOLUTION: An initial investment of 25,000 earns 5% annual interest compounded monthly. How much will be in the account after 4 years?
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Question 1061169: An initial investment of 25,000 earns 5% annual interest compounded monthly. How much will be in the account after 4 years?
Answer by Theo(13342) (Show Source): You can put this solution on YOUR website!
f = p * (1+r)^n
f is the future value
p is the present value
r is the interest rate per time period.
n is the number of time periods.
you have:
p = 25,000
r = 5% / 12 / 100 = .0041666667
n = 4 * 12 = 48
formula becomes f = 25,000 * (1.0041666667)^48.
solve for f to get f = 30522.38388
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