In this video on Compound Interest Examples, here we discuss top examples of compound interest along with its calculations and formula.
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Below are some examples of compound interest to understand the topic in better way.
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Mr. A makes an initial $6,000 investment over a 4 year period. Find the investment value after 4 years if the investment earns a monthly compounded return of 12%.
By using the compound interest formula we will calculate the value of the investment after the period of 3 years โ
A = P (1 + r / m) ^ mt
P=$6000, r=12%, m=1, t=4 years
Therefore by using above formula we get,
A = $ 6,000 (1 + 0.12 / 1) 1*4
A = $ 6,000 (1 + 0.12) 4
A = $ 6,000 (1.12) 4
A = $ 6,000 * 1.574
A = $ 9,441
๐๐ฑ๐๐ฆ๐ฉ๐ฅ๐ #๐ โ ๐๐จ๐ฆ๐ฉ๐จ๐ฎ๐ง๐๐๐ ๐๐จ๐ง๐ญ๐ก๐ฅ๐ฒ
Mr.Y makes an initial 6 year investment of $12,000. Find the investment value after 6 years if the investment earns a monthly compounded return of 4%.
By using the compound interest formula we will calculate the value of an investment after the period of 6 years โ
A = P (1 + r / m) ^ mt
P=$12000, r=4%, m=12, t=6 years
Therefore by using above formula we get,
A = $ 12,000 (1 + 0.04 / 12) ^ 12*6
A = $ 12,000 (1 + 0.04 /12) ^72
A = $ 12,000 (1.0033) ^72
A = $ 12,000 * 1.2707
A = $ 15, 248
To know more about the ๐๐จ๐ฆ๐ฉ๐จ๐ฎ๐ง๐ ๐๐ง๐ญ๐๐ซ๐๐ฌ๐ญ ๐๐ฑ๐๐ฆ๐ฉ๐ฅ๐๐ฌ, you can go to this ๐ฅ๐ข๐ง๐ค ๐ก๐๐ซ๐:- https://www.wallstreetmojo.com/compound-interest-examples/
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