FV=(240)[1+(0.09/12)]^(12*14]
=(240)[1+0.0075]^168
=(240)(3.5088855954842)
=$842.13 ( answer )
Answer:
$842.13.
Step-by-step explanation:
We have been given that $240 is invested at an interest rate of 9% per year and is compounded monthly. We are asked to find the value of investment after 14 years.
We will use compound interest formula to solve our given problem.
[tex]A=P(1+\frac{r}{n})^{nT}[/tex], where,
A = Final amount after T years,
P = Principal amount,
r = Annual interest rate in decimal form,
n = Number of times interest is compounded per year,
T = Time in years.
[tex]r=9\%=\frac{9}{100}=0.09[/tex]
[tex]A=\$240(1+\frac{0.09}{12})^{12*14}[/tex]
[tex]A=\$240(1+0.0075)^{168}[/tex]
[tex]A=\$240(1.0075)^{168}[/tex]
[tex]A=\$240*3.508885595[/tex]
[tex]A=\$842.1325428[/tex]
[tex]A\approx \$842.13[/tex]
Therefore, the investment will be worth $842.13 in 14 years.
