Lux Investing
What is the end value?
Which of the following amounts is closest to the end value of investing $2,000 for 1 ¾ years at a stated annual interest rate of 6% compounded monthly? $3,183, $2,221, $2,789 or $1,642.
Public Comments
- Hi, $2221 A = P(1 + r/n)^(n*t) where A is the total amount of money , P is the starting principal, r is the percentage rate as a decimal, n is the number of times interest is paid per year and t is the number of years. In this case, y = 2000( 1 + .06/12)^(12*1.75) = 2220.84 This is closest to $2,221. I hope that helps!! :-)
- You want to use the interest Formula: X=PeRT P=principal e=function R=Rate T=Time ($2000)*e^(.06)(21) X=your initial 2000 dollars times e^ 6%interest times 21 months. That is where you get the answer of $2221 Good luck
