What would be the compound amount after 19 years on an investment of $42,000 with an 11% interest rate compounded annually?
See Mon,7-1-13,10:49PM post.
$263060.28
To calculate the compound amount after 19 years on an investment with compound interest, you can use the formula:
A = P(1 + r/n)^(nt)
Where:
A = Compound amount
P = Principal amount (initial investment)
r = Annual interest rate (in decimal form)
n = Number of times interest is compounded per year
t = Number of years
In this case, the principal amount (P) is $42,000, the annual interest rate (r) is 11% (or 0.11 in decimal form), the interest is compounded annually (n = 1), and the investment period (t) is 19 years.
Now, let's plug the values into the formula:
A = 42,000(1 + 0.11/1)^(1*19)
First, simplify the term inside the parentheses:
A = 42,000(1 + 0.11)^(19)
Next, calculate the value inside the parentheses:
A = 42,000(1.11)^(19)
Now, raise the value inside the parentheses to the power of 19:
A ≈ 42,000(4.319)
Finally, calculate the compound amount (A):
A ≈ $181,398.00
Therefore, after 19 years, the compound amount on an investment of $42,000 with an 11% interest rate compounded annually would be approximately $181,398.00.