Problem

Find the future value of the following investment. $\begin{array}{lccc}\text { Principal } & \begin{array}{c}\text { Nominal } \\ \text { Rate }\end{array} & \begin{array}{c}\text { Frequency of } \\ \text { Conversion }\end{array} & \text { Time } \\ \$ 3900.00 & 2.4 \% & \text { monthly } & 5 \text { years }\end{array}$ The future value is $\$ \square$. (Round the final answer to the nearest cent as needed. Round all intermediate values to six decimal places as needed.)

Solution

Step 1 :Given the following investment details: Principal = $3900.00, Nominal Rate = 2.4%, Frequency of Conversion = monthly, Time = 5 years.

Step 2 :The future value of an investment can be calculated using the formula: \(FV = P * (1 + r/n)^{nt}\), where FV is the future value of the investment, P is the principal amount, r is the annual interest rate (in decimal form), n is the number of times that interest is compounded per year, and t is the time the money is invested for in years.

Step 3 :Substitute the given values into the formula: \(FV = 3900.0 * (1 + 0.024/12)^{12*5}\)

Step 4 :Calculate the future value: \(FV = 4396.710786712017\)

Step 5 :Round the future value to the nearest cent: \(FV = 4396.71\)

Step 6 :Final Answer: The future value of the investment is \(\boxed{4396.71}\)

From Solvely APP
Source: https://solvelyapp.com/problems/36828/

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