Evaluate 7000(1+0.06/12)^72

Problem

7000*(1+0.06/12)72

Solution

1. Simplify the fraction inside the parentheses by dividing the interest rate by the number of periods.

0.06/12=0.005

2. Add the resulting value to 1 to find the periodic growth factor.

1+0.005=1.005

3. Calculate the power by raising the growth factor to the exponent of 72.

1.005≈1.432044279

4. Multiply the principal amount by the result of the exponentiation.

7000×1.432044279=10024.30995

5. Round the final result to two decimal places, as is standard for currency.

10024.31

Final Answer

7000*(1+0.06/12)72=10024.31

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