Question

Monique Fournier deposited $12,500 into a savings account paying 6.5% annual interest compounded monthly. What amount will she have in her account after 3 years

Answer 1

Use the compound interest formula to determine what she will have in her account in three years:

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

A (Amount)
P (Principal)
r (Interest rate)
n (Times per year the interest is compounded)
nt (time in years)


A = 12500(1 + 0.065/12)^3(12)

A = 12500(1.005)^3(12)

A = 12500(1.005)(^36)

A = 12500(1.20)

A = 15,000

Hope I helped :)