a sum of money put at11% per annum amount to 4491 in2 years 3 months what will it amount to in 3 years at the same rate
To find out what the sum of money will amount to in 3 years at the same rate, we can use the compound interest formula:
A = P * (1 + r/n)^(nt)
Where:
A = final amount (unknown)
P = principal amount (initial sum)
r = interest rate per period
n = number of compounding periods per year
t = number of years
In this case, we have:
P = $4491 (current amount)
r = 11% per annum = 11/100 = 0.11 (decimal form)
n = 1 (compounded annually)
t = 2 years + 3 months = 2 + (3/12) = 2.25 years
Now, let's calculate the future amount in 3 years:
A = 4491 * (1 + 0.11/1)^(1*2.25)
A = 4491 * (1.11)^(2.25)
A ≈ $5408.33
Therefore, the sum of money will amount to approximately $5408.33 in 3 years at the same interest rate.
Simple interest or compound interest?
at simple interest,
let the original be $x
change our times to months ---> 2 yrs, 3 months = 27 months
interest = x(.11)(27/24) = 99x/800
x+99x/800 = 4491
x(1 + 99/800)= 4491
x = 3996.44
in 3 years:
amount = 3996.44 + 3996.44(.11)(3)
= 5315.27
at compound interest:
original amount --- y
y(1.11)^(27/12) = 4491
y = 3551.13
after 3 years:
amount = 3551.13(1.11)^3
= 4856.63