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) About Me  (Show Source):
You can put this solution on YOUR website!
The MONTHLY rate is %287%2F12%29 percent, or 0.58333333 percent.

The model exponential equation is p=2500%2A%281.00583333%29%5Em,
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 t%2812%2F1%29=m so from this you have t=m%2F12

You very well can use p=2500%281%2B7%2F12%29%5E%2812t%29 because now the rate used still IS the monthly rate and 12t IS the number of months because we just found we can use 12t=m. 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) About Me  (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: A+=+2500%281+%2B+.07%2F12%29%5E%2812t%29, with A being accumulated amount after the stated time period, and t

being the time, in years, or 1%2F12

So, for 1 month, we have: highlight_green%28A+=+2500%281+%2B+.07%2F12%29%5E%2812+%2A+%281%2F12%29%29%29, or 2514.583333 ≈ $highlight_green%282514.58%29

Apply the same concept to the others



You can do the check!! 



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