SOLUTION: Suppose $2500 is invested at a rate of 7% per year compounded monthly. (round answer to the nearest cent.) Find the principal after 1 month Find the principal after 6 months F

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Question 815266: Suppose $2500 is invested at a rate of 7% per year compounded monthly. (round answer to the nearest cent.)
Find the principal after 1 month
Find the principal after 6 months
Find the principal after 1 year
Find the principal after 20 years
Im stuck at this point
1000(1+0.07/12)^12t=
I dont know how to get the answer from this point on.
Thank you!
Pamela
Found 2 solutions by josgarithmetic, MathTherapy:
Answer by josgarithmetic(39617)   (Show Source): You can put this solution on YOUR website!
The MONTHLY rate is percent, or percent.

The model exponential equation is ,
p = amount of credit or the balance
m = how many months

You might want a time variable in years instead of months. To use t for years, since 1 year is 12 months, then so from this you have

You very well can use because now the rate used still IS the monthly rate and IS the number of months because we just found we can use . NOTE VERY CAREFULLY, t is in YEARS.

Your main confusion was of forgetting that your initial principal amount was 2500 dollars.
Answer by MathTherapy(10552)   (Show Source): You can put this solution on YOUR website!

Suppose $2500 is invested at a rate of 7% per year compounded monthly. (round answer to the nearest cent.)
Find the principal after 1 month
Find the principal after 6 months
Find the principal after 1 year
Find the principal after 20 years
Im stuck at this point
1000(1+0.07/12)^12t=
I dont know how to get the answer from this point on.
Thank you!
Pamela 


Where did $1,000 come from? Isn't the principal $2,500?

Anyway, it should be: , with A being accumulated amount after the stated time period, and t

being the time, in years, or 

So, for 1 month, we have: , or  ≈ $

Apply the same concept to the others



You can do the check!! 



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