How much would 200 invested at 5 interest compounded monthly be worth after 9 years Round your answer to the nearest cent.?

Answer 1

To calculate the future value of an investment with monthly compounding interest, you can use the formula ( A = P(1 + \frac{r}{n})^{nt} ), where ( A ) is the amount of money accumulated after n years, ( P ) is the principal amount (200), ( r ) is the annual interest rate (0.05), ( n ) is the number of times that interest is compounded per year (12), and ( t ) is the number of years the money is invested (9).

Plugging in the values:

[ A = 200(1 + \frac{0.05}{12})^{12 \times 9} ]

Calculating this gives:

[ A \approx 200(1.0041667)^{108} \approx 200(1.491825) \approx 298.37 ]

Thus, after 9 years, the investment would be worth approximately $298.37.