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Determine the value of an investment of 2500 if it is invested at an interest rate of 5.25% compounded monthly for 4 years.

Solution

Determine the value of an investment of 2500 if it is invested at an interest rate of 5.25% compounded monthly for 4 years.

Solution

Amount : 3082.78

Solution steps

Translate the problem into an equation:

A = 2500 (1 + \frac{0.0525}{12})^{12 \cdot 4}

2500 (1 + \frac{0.0525}{12})^{12 \cdot 4} = 3082.78279 \dots

Round to the nearest hundredth:

3082.78

Amount : 3082.78

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