Question

Liam opened a savings account and deposited 600.00 as principal the account earns 6%interest compounded monthly what is the balance after 10 years

Answer 1

the compound interes formula is given by

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

where A is the amount, P the principal, r the rate, t the time and n the number of times interest.

In our case, we can see that

$\begin{gathered} P=600 \\ r=0.06 \\ t=10 \\ n=12\text{ (montly)} \\ by\text{ substituying these values into the formula, we have} \end{gathered}$$\begin{gathered} A=600(1+\frac{0.06}{12})^{12\cdot10} \\ A=600(1.005)^{120} \\ A=600(1.819) \\ A=1091.64 \end{gathered}$

hence, after 10 years, Liam will have 1091.64 dollars in his account.