Question
Luis decides to invest $120,000 in a mutual fund that offers him 3.1% compound interest annually. This means that each year, the amount of money he has in the fund increases by 3.1% compared to the previous year. How much total money will there be in Luis's investment after 5 years?
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Answer to a math question Luis decides to invest $120,000 in a mutual fund that offers him 3.1% compound interest annually. This means that each year, the amount of money he has in the fund increases by 3.1% compared to the previous year. How much total money will there be in Luis's investment after 5 years?
Timmothy
4.899 Answers
1. Use the compound interest formula: A = P \left(1 + \frac{r}{n}\right)^{nt}
2. Substitute the given values:P = 120,000 r = 0.031 n = 1 t = 5
3. Simplify the expression:A = 120,000 \left(1 + \frac{0.031}{1}\right)^5
4. Further simplify inside the parentheses:A = 120,000 \left(1 + 0.031\right)^5
5. Which simplifies to:A = 120,000 \left(1.031\right)^5
6. Calculate the exponent:A=120,000\left(1.1649\right)
7. Multiply to find:A\approx139789.51
Thus, the total money in Luis's investment after 5 years will be approximately139789.51
2. Substitute the given values:
3. Simplify the expression:
4. Further simplify inside the parentheses:
5. Which simplifies to:
6. Calculate the exponent:
7. Multiply to find:
Thus, the total money in Luis's investment after 5 years will be approximately
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