How much would 500 invested at 6 interest compounded monthly be worth after 4 years?

Answer 1

To calculate the future value of an investment with compound 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 (initial investment), ( r ) is the annual interest rate (decimal), ( n ) is the number of times interest is compounded per year, and ( t ) is the number of years.

For $500 invested at a 6% annual interest rate compounded monthly for 4 years:
( A = 500(1 + \frac{0.06}{12})^{12 \times 4} )
Calculating this gives approximately $634.96.