An investment earns 3% a year compounded monthly. Find the value of an initial investment of $5,000 after 6 years.

A = $5,984.74

A = P + I where

P (principal) = $5,000.00

I (interest) = $984.74

Step-by-step explanation:

First, convert R as a percent to r as a decimal

r = R/100

r = 3/100

r = 0.03 rate per year,

Then solve the equation for A

A = P(1 + r/n)nt

A = 5,000.00(1 + 0.03/12)(12)(6)

A = 5,000.00(1 + 0.0025)(72)

A = $5,984.74

Summary:

The total amount accrued, principal plus interest, with compound interest on a principal of $5,000.00 at a rate of 3% per year compounded 12 times per year over 6 years is $5,984.74.