We have been given that Willy has compounded monthly to invest his summer earnings of $4259 in the Rock Solid Bank. The bank is offering 6%. We are asked to find the amount of money will be after 5 years.
We will use compound interest formula to solve our given problem.
, where,
A = Final amount after t years,
P = Principal amount,
r = Annual interest rate in decimal form,
n = Number of times interest is compounded per year.
t = Time in years.
Since interest is compounded monthly, so and
.
Therefore, Will will have approximately in 5 years.