Question

Sam deposited $4400 in a savings account earning 6% compounded monthly. If she makes no other deposits or withdrawals, how much will she have in her account in two years?
Group of answer choices

$4959.50

$4928.00

$9342.76

$9328.00

Answer 1

Answer: $4959.50

Step-by-step explanation:

We would apply the formula for determining compound interest which is expressed as

A = P(1+r/n)^nt

Where

A = total amount in the account at the end of t years

r represents the interest rate.

n represents the periodic interval at which it was compounded.

P represents the principal or initial amount deposited

From the information given,

P = 4400

r = 6% = 6/100 = 0.06

n = 12 because it was compounded 12 times in a year.

t = 2 years

Therefore,

A = 4400(1 + 0.06/12)^12 × 2

A = 4400(1+0.005)^24

A = 4400(1.005)^24

A = 4959.5