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2 March, 11:35

You plan on going on vacation and decide to invest $2,875 into an investment fund that compounds your money monthly at 4.2%. How much money will you have to go on your vacation at the end of 3 years of high school?

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  1. 2 March, 15:32
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    Answer: you would have $3260 to go on your vacation at the end of 3 years of high school

    Step-by-step explanation:

    We would apply the formula for determining compound interest which is expressed as

    A = P (1+r/n) ^nt

    Where

    A = total amount in the account at the end of t years

    r represents the interest rate.

    n represents the periodic interval at which it was compounded.

    P represents the principal or initial amount deposited

    From the information given,

    P = $2,875

    r = 4.2% = 4.2/100 = 0.042

    n = 12 because it was compounded 12 times in a year.

    t = 3 years

    Therefore,.

    A = 2875 (1 + 0.042/12) ^12 * 3

    A = 2875 (1 + 0.042/12) ^12 * 3

    A = 2875 (1 + 0.0035) ^36

    A = 2875 (1.0035) ^36

    A = $3260
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