Answer: 4,676.96
Procedure:
The formula for compounded interest is:
[tex]factor, f=(1+r)^n[/tex]
Future value = investment * factor
Interests = future value - investment
Where r is the monthly rate, which you calculate as the % yearly rate divided by 12.
And n is the number of months which is equal to the number of years times 12.
These are the calculations:
[tex]r=(3.7/100)/12=0.037/12=0.0030833[/tex]
[tex]n=25*12=300[/tex]
[tex]factor=(1+0.0030833)^{300}=2.518[/tex]
Future value = 3080.43 *2.518 = 7,757.39
Interests = 7,757.39 - 3080.43 = 4,676.96
