SOLUTION: Brad invests $3700 in an account paying 3% compounded monthly. How much is in the account after 8 months?
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Question 1181590: Brad invests $3700 in an account paying 3% compounded monthly. How much is in the account after 8 months?
Answer by Theo(13342) (Show Source): You can put this solution on YOUR website!
formula to use is 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
your time periods will be in months.
n is equal to 8
r is equal to 3% / 12 = .25 / 100 = .025
formula becomes f = 3700 * (1 + .0025) ^ 8
solve for f to get f = 3774.650748.
round to 3774.65.
the formula uses the rate, not the percent rate.
that's why you had to divide by 100.
start with 3% and divide by 100 to get .03
divide that by 12 to get the monthly rate of .0025
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