Question

Christine has $875.83 In her savings account the account pays 9% compounded monthly. Christine does not make any deposits or withdrawals over the next six months how much interest does the account earn

Answer 1

Answer: the account earns interest of $40.16

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 = 875.83

r = 9% = 9/100 = 0.09

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

t = 6 months = 6/12 = 0.5 year

Therefore,.

A = 875.83(1+0.09/12)^0.5 × 12

A = 875.83(1+0.0075)^6

A = 875.83(1.0075)^6

A = 915.99

The interest that she earns is

915.99 - 875.83 = $40.16