Question

If $8,500 is deposited in a compound interest account paying 3.9% interest annually, how much will be in the account after 12 years? Round your answer to the nearest cent.

Answer 1

$8,500/12 yr = $13,452.58

Answer 2

The formula for amount is given by:

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

Now we are given ,

Principal (P) =$8500

rate (r) =3.9% = 0.039

period of interest (n) =1 for compounded annually

time (t) = 12 years

Plugging these values in the formula,

$A=8500(1+\frac{0.039}{1})^{1*12}$

Amount =$13452.5773053

Answer : There will be $13452.5773053 in the account after 12 years.