Rudy Banks has won $5000 to attend university. If he invests the money in an account at 12% per annum, compounded monthly, how much ca

Question

Rudy Banks has won $5000 to attend university. If he invests the money in an
account at 12% per annum, compounded monthly, how much can he draw monthly
for the next 3 years?

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Tài Đức 3 years 2021-07-17T03:39:37+00:00 1 Answers 39 views 0

Answers ( )

  1. Verity
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    2021-07-17T03:41:25+00:00
    Reply

    Answer:

    $7153.84

    General Formulas and Concepts:

    Pre-Algebra

    Order of Operations: BPEMDAS

    1. Brackets
    2. Parenthesis
    3. Exponents
    4. Multiplication
    5. Division
    6. Addition
    7. Subtraction
    • Left to Right

    Algebra I

    Compounded Interest Rate Formula: \displaystyle A = P(1 + \frac{r}{n})^{nt}

    • P is principle amount
    • r is rate
    • n is compound rate
    • t is time

    Step-by-step explanation:

    Step 1: Define

    Identify variables

    P = 5000

    r = 12% = 0.12

    n = 12

    t = 3

    Step 2: Find Interest

    1. Substitute in variables [Compounded Interest Rate Formula]:                     \displaystyle A = 5000(1 + \frac{0.12}{12})^{12(3)}
    2. [Exponents] Multiply:                                                                                        \displaystyle A = 5000(1 + \frac{0.12}{12})^{36}
    3. (Parenthesis) Add:                                                                                            \displaystyle A = 5000(1.01)^{36}
    4. Evaluate exponents:                                                                                         \displaystyle A = 5000(1.43077)
    5. Multiply:                                                                                                             \displaystyle A = 7153.84

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