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 amount at the end of the period, we can use the formula for compound interest:
A = P(1 + r/n)^(nt)
Where:
A = the amount of money accumulated after n years, including interest
P = the principal amount (the initial amount of money)
r = the annual interest rate (as a decimal)
n = the number of times that interest is compounded per year
t = the number of years the money is invested for
In this case:
P = $500,000.00
r = 15% or 0.15
n = 1 (interest is compounded annually)
t = 2 years
Plugging in the values, we get:
A = $500,000.00(1 + 0.15/1)^(1*2)
A = $500,000.00(1 + 0.15)^2
A = $500,000.00(1.15)^2
A = $500,000.00(1.3225)
A = $661,250.00
So, at the end of the 2-year period, the amount accumulated will be $661,250.00.