To solve this problem, we will use the formula for compound interest, which is:

A = P (1 + r/n)^(nt)

Where:
- A is the amount of money accumulated after n years, including interest.
- P is the principal amount (the initial amount of money).
- r is the annual interest rate (in decimal form, so 3% becomes 0.03).
- n is the number of times that interest is compounded per year.
- t is the time the money is invested for in years.

Given in the problem:
P = $2000
r = 3% = 0.03
n = 12 (since it's compounded monthly)
t = 4 years

Substitute these values into the formula:

A = 2000 (1 + 0.03/12)^(12*4)

Now, calculate the expression inside the parentheses:

1 + 0.03/12 = 1.0025

Then, raise this result to the power of 48 (which is 12 times 4):

(1.0025)^48 ≈ 1.126825030131969720661201

Finally, multiply this result by the initial principal amount:

A = 2000 * 1.126825030131969720661201 ≈ $2253.65

So, the total amount after 4 years will be approximately $2253.65.

Question

To solve this problem, we will use the formula for compound interest, which is:

A = P (1 + r/n)^(nt)

Where:
- A is the amount of money accumulated after n years, including interest.
- P is the principal amount (the initial amount of money).
- r is the annual interest rate (in decimal form, so 3% becomes 0.03).
- n is the number of times that interest is compounded per year.
- t is the time the money is invested for in years.

Given in the problem:
P = $2000
r = 3% = 0.03
n = 12 (since it's compounded monthly)
t = 4 years

Substitute these values into the formula:

A = 2000 (1 + 0.03/12)^(12*4)

Now, calculate the expression inside the parentheses:

1 + 0.03/12 = 1.0025

Then, raise this result to the power of 48 (which is 12 times 4):

(1.0025)^48 ≈ 1.126825030131969720661201

Finally, multiply this result by the initial principal amount:

A = 2000 * 1.126825030131969720661201 ≈ $2253.65

So, the total amount after 4 years will be approximately $2253.65.

Knowee AI · Accepted Answer