You deposit $10,000 today in a fund earning interest at j_× = 8%.How much will you have accumulated at the end of 21 months?

Question

Quizplus · Accepted Answer

We can use the formula for compound interest:

A = P(1 + r/n)^(nt)

Where:
A = Total amount accumulated
P = Principal (initial amount deposited) = $10,000
r = Annual interest rate = 8% = 0.08
n = Number of times the interest is compounded per year = 12 (monthly compounding)
t = Number of years = 21/12 = 1.75 (21 months divided by 12 months per year)

Substituting the values, we get:

A = $10,000(1 + 0.08/12)^(12*1.75)
A = $11,502.74

Therefore, the answer is A.

You Deposit $10,000 Today in a Fund Earning Interest at J×

You Deposit $10,000 Today in a Fund Earning Interest at J_×