Question

You deposit $20,000 in an account that pays 7.77% annual interest. Find the balance after 2 years when the interest is compounded monthly.

Answer 1

Answer:

The account balance after 24 months will be $23,092.70

Step-by-step explanation:

Given data

P= $20,000

r= 7.77%= 0.077

t= 2 years

A= ?

n= 24

The compound interest formula is

$A= P(1+t)^t$

Inserting our values to solve for A we have

$A= 20000(1+\frac{0.077}{24} )^2^*^2^4\\\\A= 20000(1+0.003 )^2^*^2^4\\\\A= 20000(1.003 )^2^*^2^4\\\A= 20000(1.003 )^4^8\\\A= 20000*1.15463517818\\\A= 23092.7035636\\\A= 23,092.70$