# Value of Investment after 2 years

Find the accumulated amount after 2 years if RM 35,000 is invested at 3.8 % per year compounded:

(i) Annually
(ii) Semi Annually
(iii) Monthly

### Comments for Value of Investment after 2 years

 Oct 07, 2012 Value of Investment by: Staff Answer: The interest rate paid by the bank is a constant: 3.8 % per year. A = P*(1 + r)t A = final value of investment P = principle invested (the initial investment) r = decimal form of interest rate per time period t = time in time periods P = RM 35,000 (i) Final Value of Investment if interest is compounded Annually r = .038 (this is the decimal form of 3.8%. It is = 3.8%÷100) t = 2 years A = P*(1 + r)t A = 35000*(1 + .038)2 A = 35000*(1.038)2 A = 35000*(1.077444) A = 37710.54 If interest is compounded annually, the value of the investment after two years = RM37710.54 (ii) Final Value of Investment if interest is compounded Semi Annually r = .038 ÷ 2 = 0.019 (0.038 is the decimal form of 3.8%. It is = 3.8%÷100) t = 4 sixth month time periods A = P*(1 + r)t A = 35000*(1 + 0.019)4 A = 35000*(1.019)4 A = 35000*(1.078193566321) A = 37736.77 If interest is compounded semi-annually, the value of the investment after two years = RM37736.77 (iii) Final Value of Investment if interest is compounded Monthly r = .038 ÷ 12 = 0.0031666666667 (0.038 is the decimal form of 3.8%. It is = 3.8%÷100) t = 24 one month time periods A = P*(1 + r)t A = 35000*(1 + 0.0031666666667)24 A = 35000*(1.0031666666667)24 A = 35000*(1.078833) A = 37759.15 If interest is compounded monthly, the value of the investment after two years = RM37759.15 Thanks for writing. Staff www.solving-math-problems.com