Whats this answer? (1 Viewer)

[th]

I invest $24000 at an interest rate of 4.75% per annum compuonded monthly. What is the value of the investment after 3 yrs?

 

[Dreamerish*~]

A = P(1 + R)ⁿ

P = $24000, R = 0.0475/12, n = 36

A = 24000(1 + 0.0475/12)³⁶

A = $27667.90 (to the nearest 10c)

 

[Jago]

Actually.

A = 24000*(1+ 19/4800)^36

A = $27667.90

 

[Dreamerish*~]

Actually.

A = 24000*(1+ 19/4800)^36

A = $27667.90

Oops, didn't see the monthly.

Can't even do general maths.

 

[...]

Actually.

A = 24000*(1+ 19/4800)^36

A = $27667.90

yeap, its 36, instead of 3

as it is compounded monthly and it is over 3 years.

 

[rego2]

How did he get 19/4800?
isnt it 4.75/12 = 0.3958 each month?

 

[Jago]

it's 0.0475/12

you have to convert percentages.

 

[PC]

... or for those using graphic calculators:

n = 3 x 12
I = 4.75%
PV = 24000
PMT = 0
FV = ?
P/Y = 12
C/Y = 12

So FV = $27667.89

Hope that helps someone.