Fakhrul deposits RM220 every month in an account that pays 6% compounded monthly. Find the amount in the account after 4 years 6 months.
To find the amount in the account after 4 years 6 months, we need to calculate the future value of the monthly deposits.
First, we need to convert the time period to months.
4 years = 4 * 12 = 48 months
6 months = 6 months
Total time period = 48 months + 6 months = 54 months
Next, we'll use the compound interest formula to calculate the future value:
A = P(1 + r/n)^(nt)
Where:
A = future value (amount in the account after 4 years 6 months)
P = monthly deposit amount (RM220)
r = annual interest rate (6% or 0.06)
n = number of times interest is compounded per year (monthly, so n = 12)
t = time period in years (4 + 6/12 = 4.5 years or 54 months)
Substituting the values into the formula:
A = 220(1 + 0.06/12)^(12 * 4.5)
= 220(1 + 0.005)^(54)
≈ 220(1.005)^(54)
≈ 220(1.34282)
≈ RM295.62
Therefore, the amount in the account after 4 years 6 months is approximately RM295.62.