Question

Spencer opened a savings account and deposited $10. The account pays 3.5% interest and compounds the interest monthly. How much money will Spencer have after 10 years? **n=12 because it is compounded monthly.

Answer 1

Answer:

$\ 14.18$  

Step-by-step explanation:

we know that    

The compound interest formula is equal to  

$A=P(1+\frac{r}{n})^{nt}$  

where  

A is the Final Investment Value  

P is the Principal amount of money to be invested  

r is the rate of interest  in decimal

t is Number of Time Periods  

n is the number of times interest is compounded per year

in this problem we have  

$t=10\ years\\ P=\ 10\\ r=0.035\\n=12$  

substitute in the formula above  

$A=P(1+\frac{0.035}{12})^{12*10}=\ 14.18$