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
This seems like an economics question to me.. If you want to find the value for the future? You do $2000 x (1.09)^ 7 put this into your calculator exactly as I have it here to get your answer.
More detils plese..
To calculate the amount accumulated (future value) using compound interest, follow these steps:
Step 1: Divide the annual interest rate by 12 to get the monthly interest rate:
Monthly interest rate = (9% / 100) / 12 = 0.0075
Step 2: Calculate the number of compounding periods by multiplying the number of years by 12 (since compounding is done monthly in this case):
Number of compounding periods = 7 years * 12 months/year = 84
Step 3: Use the compound interest formula to calculate the future value:
Future value = Initial principal * (1 + Monthly interest rate)^Number of compounding periods
Plugging in the given values:
Future value = $2000 * (1 + 0.0075)^84
Step 4: Calculate the future value using a calculator or spreadsheet software:
Future value = $2000 * (1.0075)^84 ≈ $3,022.52
Therefore, the amount accumulated (future value) after 7 years with monthly compounding at a 9% interest rate is approximately $3,022.52.