Giselle has been advised by her financial planner to invest $32,000 today in a mutual fund. If the mutual fund earns 14 percent interest compounded monthly, to what amount will her investment grow in 16 years? Use a financial calculator to determine the amount. (Round your answer to two decimal places.)

$298, 597.12

Explanation:

The future value of 32,000 compounded monthly at 14 % interest

14% compounded monthly means interest will be earned every month. The monthly rate will be 14% divided by 12.

compounding every month implies  12 times per year. In 16 years, the interest will be compounded  12 x 16 times.

The formula for future value

FV= PV x (1+ r)n

in this case

PV = $32,000

interest rate : 14% /12= 0.0117

period : 12 x 16= 192

FV= $32,000 X (1 + 0.0117) 192

=32,000 x (1.0117) 192

=32,000 X 9.33116

=$298, 597. 12