Question

7,300 deposit earning 3.3% compounded monthly after 1 year. What will the balance after 1 year will be?

Answer 1

Answer:

$7,544.58

Step-by-step explanation:

We will 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, change 3.3% into its decimal form:

3.3% -> $\frac{3.3}{100}$ -> 0.033

Since the interest is compounded monthly, we will use 12 for n. Lets plug in the values now:

$A=7,300(1+\frac{0.033}{12})^{12(1)}$

$A=7,544.58$

The balance after 1 year will be $7,544.58