Hello!
A) Equation:
[tex]A=P\mleft(1+\frac{r}{n}\mright)^{nt}[/tex]
Variables:
• A = amount
,
• P = principal
,
• r = rate
,
• n = number of periods (12 months)
,
• t = time (iwhole or decimals)
B)
• P = $6500
,
• t = 10 years
,
• r = 3.7% = 0.037
Using the information in the formula:
[tex]\begin{gathered} A=6500(1+\frac{0.037}{12})^{12\cdot10} \\ \\ A=6500\cdot(1.00030833)^{120} \\ A=$\$9,404.92$ \end{gathered}[/tex]
C)
Let's consider the same information as above, just changing the time to 20 years:
[tex]\begin{gathered} A=6500(1+\frac{0.037}{12})^{12\cdot20} \\ \\ A=6500\cdot(1.00030833)^{240} \\ A=$\$13,608.08$ \end{gathered}[/tex]
Let's calculate the difference:
[tex]\$13,608.08-$\$9,404.92$=\$4203.16[/tex]
