Question

You deposit $2000 in an account earning 3% interest compounded monthly. How much will you have in the account in 5 years

Answer 1

Answer:

$2,323.23

Step-by-step explanation:

Lets use the compound interest formula provided to solve this:

$A=P(1+\frac{r}{n} )^{nt}$

P = initial balance

r = interest rate (decimal)

n = number of times compounded annually

t = time

First, we will change 3% into its decimal form:

3% -> $\frac{3}{100}$ -> 0.03

Now, plug the values into the equation:

$A=2,000(1+\frac{0.03}{12})^{12(5)}$

$A=2,323.23$

After 5 years, you will have $2,323.23