Question

If you deposit $850 into an account which earns 6% yearly interest compounded monthly, how much will be in the account after 4 years, assuming you never withdraw money from the account? Round your answer to the nearest cent if necessary and do not include the dollar sign.

Answer 1

Answer:

1079.9

Step-by-step explanation:

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

A: ending amount

P: principal (850)

r: interest rate in decimal form (.06)

n: compounding periods, 12 months in a year.

t: time in years (4)

   = 850(1 + .06/12)^12(4)

    = 850(1.005)⁴⁸

    = 850(1.2704891)

    = 1079.9157