What is the future value of a 5-year investment of $3000 at an APR of 7% compounded monthly?

Question

Quizplus · Accepted Answer

Using the formula for compound interest, we get:
Future Value = P(1+(r/n))^(nt)
Where:
P = principal amount (initial investment) = $3000
r = annual interest rate = 7% = 0.07
n = number of times the interest is compounded per year = 12 (monthly)
t = time the money is invested (in years) = 5

Plugging in the values, we get:
Future Value = 3000(1+(0.07/12))^(12*5)
= $4252.88

What Is the Future Value of a 5-Year Investment of $3000