Compound Interest
Find the amount of money gained from an investment of $4800 for 3 years at 12% per annum
I assume it is compounded yearly
4800 *(1.12)^3 = 6742.65
the gain is 6742.65 - 4800 = 1943.65
To find the amount of money gained from an investment with compound interest, you can use the formula:
A = P(1 + r/n)^(n*t)
Where:
A = the final amount (including both the principal and interest)
P = the initial principal amount ($4800)
r = annual interest rate (12% or 0.12 as a decimal)
n = the number of times interest is compounded per year (assuming it is compounded annually)
t = the number of years (3 years)
First, convert the percentage interest rate to a decimal by dividing by 100:
r = 12/100 = 0.12
In this case, the interest is compounded annually, so n = 1.
Plug the values into the formula:
A = 4800(1 + 0.12/1)^(1*3)
Simplifying the equation:
A = 4800(1 + 0.12)^3
A = 4800(1.12)^3
A = 4800(1.404928)
A ≈ 6,739.9
Therefore, the amount of money gained from an investment of $4800 for 3 years at 12% per annum would be approximately $6,739.9.