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Septima invests $3,000 in an account with an annual interest rate of 5.2% compounded monthly for 3 years.What is the return on investment for Septima's account?16.8%1.3%14.4%5.3%

Sagot :

Given:

Principal, P=$3000

Interest rate, r=0.052

Years, t=3 years

To find the return amount is compounded monthly:

Using the formula,

[tex]\begin{gathered} A=P(1+\frac{r}{12})^{12t}_{} \\ =3000(1+\frac{0.052}{12})^{12\times3} \\ =3000(1+0.00433)^{36} \\ =3505.30 \end{gathered}[/tex]

Hence, the return amount on investment is $3505.30.

In percentage,

The return on investment is,

[tex]\begin{gathered} \frac{3505.3}{3000}\times100=16.84 \\ \approx16.8\text{ \%} \end{gathered}[/tex]

Hence, the answer is 16.8%.

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