Problema Solution
Assume an investment of $2000 earns an APR of 6% compounded monthly for 18 months.
How much money is in your account after 18 months? (Round your answer to the nearest cent.)
Answer provided by our tutors
P = $2,000 the principal
r = 0.06 or 6% APR
m = 12 compounding period per year
i = 0.06/12 interest rate per period
t = 18 months
n = 18 total number of compounding periods
A = future value
A = P(1 + i)^n
A = 2000(1 + 0.06/12)^18
A = $2,187.86
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after 18 months there is $2,187.86 in your account.