John deposited $2,860 in a bank that pays 9% interests, compounded monthly. Find the amount he will have at the end of 3 years?

The amount he will have at the end of 3 years is $3742.73

Step-by-step explanation:

* The formula for annual compound interest is:

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

Where:

A = Total money after t years

P = the investment amount (the initial deposited amount)

r = the annual interest rate (decimal)

n = the number of times that interest is compounded per year

t = the number of years the money is invested

∵ P = $2860 ⇒ deposited

∵ r = 9% = 9/100 = 0.09 ⇒ annual rate

∵ n = 12 ⇒ compounded monthly

∵ t = 3 years

∴ A = 2860 (1 + 0.09/12) ^ (12 * 3)

∴ A = 2860 (1.0075) ^36 = $3742.73

* The amount he will have at the end of 3 years is $3742.73

The amount he will have at the end of 3 years = $3742

Step-by-step explanation:

Formula for compound interest

A = P[1 + R/n]^nt

A - Amount

P - Principle amount

R - rate of interest

n - Number of times in which the amount compounded

t - Number of years

To find the amount

Here,

P = $2,860, R = 9% = 0.09

n = 12 and t = 3 years

A = P[1 + R/n]^nt

=2860[1 + 0.09/12]^ (12*3)

= 2860[1 + 0.0075]^36 = 3742.7257 ≈ $3742