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Popular Word Problems >

A 5000 investment pays 3% interest compounded monthly. To the nearest cent, what will be the value of the investment after 10 years?

Solution

A 5000 in v es t m e n t p a ys 3% in t eres t co m p o u n d e d m o n t h l y . T o t h e n e a res t ce n t, w ha t w i ll b e t h e v a l u e o f t h e in v es t m e n t a f t er 10 ye a rs ?

Solution

Amount : 6746.77

Solution steps

Translate the problem into an equation:

A = 5000 (1 + \frac{0.03}{12})^{12 \cdot 10}

5000 (1 + \frac{0.03}{12})^{12 \cdot 10} = 6746.76773 \dots

Round to the nearest hundredth:

6746.77

Amount : 6746.77

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