A man invested 500,000.00 at 15% rate per annum for 2years. Calculate the amount at the end of the period
To calculate the compound interest earned on the investment, we use the formula:
A = P(1 + r/n)^(nt)
Where:
A = the amount of money accumulated after n years, including interest.
P = the principal amount (500,000.00 in this case)
r = the annual interest rate (15% or 0.15)
n = the number of times that interest is compounded per year (assuming compounded annually, so n = 1)
t = the time the money is invested for in years (2 years in this case)
Plugging in the values:
A = 500,000(1 + 0.15/1)^(1*2)
A = 500,000(1 + 0.15)^2
A = 500,000(1.15)^2
A = 500,000(1.3225)
A = 661,250.00
Therefore, the amount at the end of the 2-year period would be 661,250.00.