Use benchmarks to estimate the sum, difference, or product.
1 answer:
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Answer:
$1,229.75
Step-by-step explanation:
Lets use the compound interest formula provided to solve this:
<em>P = initial balance</em>
<em>r = interest rate (decimal)</em>
<em>n = number of times compounded annually</em>
<em>t = time</em>
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First, change 3.25% into a decimal:
3.25% -> -> 0.0325
Since the interest is compounded monthly, we will use 12 for n. Lets plug in the values now:
Lastly, subtract A from P to get the interest earned: