Suppose that 12,000is deposited for seven years at 4% APR. Calculate the interest earned if interest is compounded monthly. Round your answer to the nearest cent.

Solution

Suppose that 12, 000is deposited for seven years at 4% APR. Calculate the interest earned if interest is compounded monthly. Round your answer to the nearest cent.

Solution

Interest : 3870.17

Solution steps

Translate the problem into an equation:

15870.16636 \dots = 12000 + I

Solve for

I, 15870.16636 \dots = 12000 + I : I = 3870.17

Interest : 3870.17

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