Find the accumulated value of an investment of $5000 at 5% compounded monthly for 8 years.
7452.93
thanks
To find the accumulated value of an investment, we can use the formula for compound interest:
A = P * (1 + r/n)^(nt)
Where:
A = accumulated value after n years
P = initial principal (investment amount)
r = annual interest rate (expressed as a decimal)
n = number of times interest is compounded per year
t = number of years
In this case, let's break down the given information:
P = $5000 (Initial investment)
r = 5% = 0.05 (annual interest rate)
n = 12 (compounded monthly)
t = 8 (number of years)
Now, substitute these values into the formula:
A = $5000 * (1 + 0.05/12)^(12*8)
Next, perform the calculations and simplify:
A = $5000 * (1.0041667)^(96)
A ≈ $5000 * (1.431017909)
A ≈ $7155.09
Therefore, the accumulated value of an investment of $5000 at 5% compounded monthly for 8 years is approximately $7155.09.
i = .05/12 = ..004166667
amount = 5000(1.004166667)^96
= ....