Question

If I invested $4500 at 10% compounded monthly. How much would be in the account in 3 years? Round to nearest cent

Answer 1

Answer:

$6,066.82

Step-by-step explanation:

Lets use the compound interest formula provided to solve this:

$A=P(1+\frac{r}{n} )^{nt}$

P = initial balance

r = interest rate (decimal)

n = number of times compounded annually

t = time

First, change 10% into a decimal:

10% -> $\frac{10}{100}$ -> 0.10

Since the interest is compounded monthly, we will use 12 for n. Lets plug in the values now:

$A=4,500(1+\frac{0.10}{12})^{12(3)}$

$A=6,066.82$

The balance after 3 years will be $6,066.82