if 12,025 was invested at 3.25% compounded monthly 3 years, how much interest will be earned

Question

if 12,025 was invested at 3.25% compounded monthly 3 years, how much interest will be earned

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Savannah 2 weeks 2021-11-16T07:45:47+00:00 1 Answer 0 views 0

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    2021-11-16T07:47:08+00:00

    Answer:

    $1,229.75

    Step-by-step explanation:

    Lets use the compound interest formula provided to solve this:

    A=P(1+\frac{r}{n} )^{nt}

    P = initial balance

    r = interest rate (decimal)

    n = number of times compounded annually

    t = time

    First, change 3.25% into a decimal:

    3.25% -> \frac{3.25}{100} -> 0.0325

    Since the interest is compounded monthly, we will use 12 for n. Lets plug in the values now:

    A=12,025(1+\frac{0.0325}{12})^{12(3)}

    A=13,254.75

    Lastly, subtract A from P to get the interest earned:

    13,254.75 - 12,025 = 1,229.75

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