Question

You deposit $1,600 in a bank account. The account pays 3% annual Interest compounded monthly. Find the balance after 5 years

Answer 1

Step-by-step explanation:

step 1. let's call the amount of money A, the initial amount P, the yearly rate r, the number of compounds per year n.

step 2. A = P(1 + r/n)^(nt)

step 3. A = 1600(1 + .03/12)^((12)(5)

step 4. A = 1600(1.0025)^(60)

step 5. A = $1858.59