Question

Cooper is opening an online savings account to hold his $20,000
emergency fund. The online account pays 1.5% interest compounded
monthly. If Cooper does not deposit or withdraw any money from the
account, how much will be in the account in 5 years

Answer 1

Answer:

Given the amount deposited in the bank = $20000

The interest rate earned = 1.5%

Step-by-step explanation:

Since we have given the present value, interest rate, and the time period of 5 years. Now we are required to find the amount after five years.

Amount after 5 Years = present value (1+ interest rate)^n

n = Number of compounding periods

n= 5×12 = 60

Interest rate = 1.5%/12

Now insert the values in the formula.

Amount after 5 Years = 20000 (1+ 1.5%/12)^60

Amount after 5 Years = $21,556.67

Answer 2

The amount in 5 years should be $21,556.67

Given that,

• Cooper is opening an online savings account to hold his $20,000  emergency fund.
• The online account pays 1.5% interest compounded  monthly.
• And, there is 5 years.

Based on the above information, the calculation is as follows:

$= \ 20,000 \times (1+ 1.5\%\div 12)^{5\times 12}$

= $21,556.67

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