You have deposited 1000$ in your saving account with an anual interst rate of 4 percent compund monthly. How much money are you going to have in your account after six months.
Use A=P*(1+r)^6
r=.04/12=.01/3, P=1000
IS THE ANSWEAR 5610.23
No, if the annual interest rate is 4% then the answer should be close to 1040.
If you use A=P*(1+r)^6 with r=(.04)/12 = .033333 and P=1000 you shouldn't get
that for an answer.
To calculate the amount of money you will have in your account after six months, you need to use the compound interest formula:
A = P * (1 + r/n)^(nt)
Where:
A = the future value of the investment/loan, including interest
P = the principal investment amount (in this case $1000)
r = annual interest rate (in this case 4% or 0.04)
n = number of times that interest is compounded per year (in this case 12, as it is compounded monthly)
t = number of years the money is invested for (in this case 6 months, so t = 6/12 = 0.5)
Substituting these values into the formula:
A = 1000 * (1 + 0.04/12)^(12 * 0.5)
Simplifying the equation:
A = 1000 * (1.0033333)^(6)
Calculating the exponent:
A = 1000 * (1.0202013)
A = 1000 * 1.0202013
A ≈ 1020.20
So, you will have approximately $1020.20 in your account after six months, not $5610.23.