Given:
rate (r) = 5.4% or 0.054 in decimal form
Principal (P) = $3,000
time in years (t) = 3 years
number of conversions per year (m) = 12 (because it says monthly)
Find: future value or maturity value
Solution:
The formula for getting the future value of a compound interest is:
[tex]F=P(1+\frac{r}{m})^{mt}[/tex]Let's plug in the given data to the formula above.
[tex]F=3,000(1+\frac{0.054}{12})^{12\times3}[/tex]Then, solve for F or future value.
[tex]\begin{gathered} F=3,000(1.0045)^{36} \\ F=3,000(1.17532999) \\ F\approx3,526.30 \end{gathered}[/tex]Answer: After 3 years, the deposited money will become $3, 526.30.
