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Answer:
<u>Equation</u>:
<u>The balance after 5 years is: $1742.43</u>
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Step-by-step explanation:
This is a compound growth problem . THe formula is:
Where
F is future amount
P is present amount
r is rate of interest, annually
n is the number of compounding per year
t is the time in years
Given:
P = 1500
r = 0.03
n = 12 (compounded monthly means 12 times a year)
The compound interest formula modelled by the variables is:
Now, we want balance after 5 years, so t = 5, substituting, we get:
<u>The balance after 5 years is: $1742.43</u>