Question

You deposit $5,500 into a saving account that pays an annual interest rate of 5.5% compounded monthly.

Answer 1

Answer:

$9520.92

General Formulas and Concepts:

Pre-Algebra

Order of Operations: BPEMDAS

1. Brackets
2. Parenthesis
3. Exponents
4. Multiplication
5. Division
6. Addition
7. Subtraction

• Left to Right

Algebra I

Compounded Interest Rate Formula: $\displaystyle A = P(1 + \frac{r}{n})^{nt}$

• P is principle amount
• r is rate
• n is compounded rate
• t is time

Step-by-step explanation:

Step 1: Define

Identify variables

P = 5500

r = 5.5% = 0.055

n = 12

t = 10

Step 2: Find A

1. Substitute in variables [Compounded Interest Rate Formula]:                     $\displaystyle A = 5500(1 + \frac{0.055}{12})^{12(10)}$
2. (Parenthesis) Divide:                                                                                         $\displaystyle A = 5500(1 + 0.004583)^{12(10)}$
3. (Parenthesis) Add:                                                                                            $\displaystyle A = 5500(1.004583)^{12(10)}$
4. [Exponents] Multiply:                                                                                        $\displaystyle A = 5500(1.004583)^{120}$
5. Evaluate exponents:                                                                                         $\displaystyle A = 5500(1.73108)$
6. Multiply:                                                                                                             $\displaystyle A = 9520.92$