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info@snapandsolve.comTo find the maturity value of the investment, we use the formula for compound interest:
A = P(1 + r/n)^(nt)
where:
P = principal amount ($5,000)
r = annual interest rate (9% or 0.09)
n = number of times interest is compounded per year (12)
t = number of years (10)
Substituting the values, we get:
A = 5000(1 + 0.09/12)^(12*10)
A = 5000(1 + 0.0075)^(120)
A = 5000(1.0075)^(120)
A ≈ 5000 * 2.36736
A ≈ $11,836.80
The maturity value of the investment is approximately $11,836.80.
To find the interest earned, subtract the principal from the maturity value:
Interest = A - P
Interest = 11,836.80 - 5,000
Interest ≈ $6,836.80
The interest earned on the investment is approximately $6,836.80.
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