# geometry

posted by .

Using the following values, calculate the amount accumulated (future value):

Initial Principal = \$9000
Interest Rate = 8%
Number of years = 9
Monthly Compounding

• geometry -

The formula for compound interest is:
Final amount or future value,
A = PR^n
where
P = principal
R = rate of interest per period, for example, 8% p.a. is 2/3% per month.
R is expressed as 1+rate, so for monthly compounding, R for 8% is 1+8/1200=1.00666667
n = number of periods, month in this case.

• geometry -

This is what i came up with..Dont know if im right.please let me know.

FV= 9000 (1+0.08)9

= 1.08^9 = 1.9990
= 8000 (1.9990) = 17991.00

Future Value = \$17, 991.00

• geometry -

What you've done is correct if it is compounded annually.

The question specifies compounded monthly.

What you need to do is to divide the interest into monthly interest rate, namely
R=1+0.08/12
and compound it over n=9*12=108 periods.

It will increase the final amount by about \$450.

• geometry -

Got it..Thank you!

• geometry :) -

You're welcome!

## Respond to this Question

 First Name School Subject Your Answer

## Similar Questions

1. ### Finance

Calculating Interest Rate. Find the interest rate implied by the following combinations of present and future values. PresentValue Years Future Value \$400 11 \$684 \$183 4 \$249 \$300 7 \$300 Since you do not state otherwise, I am assuming …
2. ### programming

Having troube with java, i am not a regular programmer, if anybody can help me out writting this program: write a program that takes two numbers from the java console representing, respectively, an investment and an interest rate(you …
3. ### Math

compound and interest Using the below values please calculate the amount accumulated (future value) *Initial principal=\$2000 *Interest Rate=9% *Number of years 7 *Monthly compounding
4. ### Math

compound and interest Using the below values please calculate the amount accumulated (future value) *Initial principal=\$2000 *Interest Rate=9% *Number of years 7 *Monthly compounding
5. ### Math

compound and interest Using the below values please calculate the amount accumulated (future value) *Initial principal=\$2000 *Interest Rate=9% *Number of years 7 *Monthly compounding
6. ### algebra

A grandmother is looking for a plan to finance her new grandchild’s college education. She has \$25,000 to invest. Search the internet and locate a long-range investment plan, CD, Savings Bond, etc, for the grandmother. The plan is …
7. ### math

Find the accumulated amount A, if the principal P is invested at an interest rate of r per year for t years. P = \$24,000, r = 7%, t = 6, compounded monthly \$ ?
8. ### math

Find the total number of compounding periods and interest rate per period.  Princial: \$700, time period :8yrs , nomial rate: 1.5%, interest compounding :monthly, copounding amount________, compound interest_______  * i need to figure …
9. ### Math

Using the formula. I =Prt ,calculate the simple interest where t=1/n and n is the number of periodd per year for compounding. You have \$20,000 and wished to invest it in one of two ways. Option A: You may invest it in a certificate …
10. ### Math

Find the accumulated amount A if the principal, P = \$3700 is invested at the interest rate r = 7%/year for t = 12.5 years compounded semiannually. Round your answers to two decimal places. ​ a. The accumulated amount is \$8544.01. …

More Similar Questions