Yahoo Answers: Answers and Comments for Financial maths Grade:10 math core? [Mathematics]
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From William
enUS
Mon, 14 Nov 2011 05:08:29 +0000
3
Yahoo Answers: Answers and Comments for Financial maths Grade:10 math core? [Mathematics]
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From jellieth1: Is the intrest rate an anual perctent or a mon...
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Mon, 14 Nov 2011 13:37:29 +0000
Is the intrest rate an anual perctent or a monthly percentage? Also, are you investing 2000.00 each year or for the whole 3 year period?
I will take it as a simple plug and chug quesiton. I think they are investion 2000.00 total and that it is an anual percent rate. In that case you can just plug in your numbers.
A=2000.00(1+[(5.5/100)])
A2=A(1+[(5.5/100)])
A3=A2(1+[(5.5/100)])
This gives you A3=2348.48
If you just used the simplified equation that you gave in your quesiton, it wil not account for the intrest on the profit for each year. I would just do it one year at a time, this doesnt account for the intrest being compounded each month, but its better than the 2330 you get if you use the simplified equation.

From Anonymous: A=P(1+r/n)^nt
r=interest rate as a decimal
n...
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Mon, 14 Nov 2011 13:24:14 +0000
A=P(1+r/n)^nt
r=interest rate as a decimal
n=number of times interest is calculate/year
t=time in years
P=principal amount
A= amount of money after t years at r interest rate calculated n times per year
Plug in our values
A=2000(1+0.055/12)^36
=R2357.897
≈R2358