Solve the compound interest problem. $3425 is invested at %7.5 compounded monthly for years. a. Find the overall amount. b. Find the compound interest.

Complete question :

Solve the compound interest problem. $3425 is invested at %7.5 compounded monthly for 2 years. a. Find the overall amount. b. Find the compound interest.

$3977.425 ; $552.425

Step-by-step explanation:

Given that:

Principal (P) = $3425

Rate (r) = 7.5% = 0.075

Time(t) = 2 years

A = p(1 + r/n)^nt

r = rate

n = number of times compounded per year

t = time in years

A = final amount

A = 3425(1 + 0.075/12)^12*2

A = 3425(1 + 0.00625)^24

A = 3425(1.00625)^24

A = 3425(1.1612920)

A = $3977.4251

Hence, overall amount = $3977.425

Compound interest = $(3977.425 - 3425) = $552.425

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