Answer:
$485,647.99
Step-by-step explanation:
Definition:
The notion of compound interest refers to the benefit (or cost) of the principal capital at an interest rate for a certain period of time, in which the interest earned at the end of each period is not withdrawn, but added to the principal capital . Therefore, interest is reinvested.
Formula:
[tex]A=P(1+\frac{r}{n} )^{n*t}[/tex]
Variables:
A = total amount
P = principal or amount of money deposited,
r = annual interest rate
n = number of times compounded per year
t = time in years
Data:
P=$12400 , r=8% , n=12 and t=46 years
Calculation:
[tex]A=12,400(1+\frac{0.08}{12} )^{12*46}[/tex]
[tex]A=12,400 * 1.006666666666666667^{552}[/tex]
[tex]A=12,400 * 39.16516018[/tex]
A = $485,647.99
Hope this helps!
