Chris Deposits $5,000 into an account that earns 2.5% intrest compounded monthly. Assuming no deposits or withdrawls are made, how much money is in the account in 10 years?

Respuesta :

$6418.46.

The formula we will use for compound interest is:

[tex]A=p(1+\frac{r}{n})^{nt}[/tex], 

where A is the total amount, p is the amount invested, r is the interest rate as a decimal number, n is the number of times per year the interest is compounded, and t is the number of years.  Using our information we have:

[tex]A=5000(1+\frac{0.025}{12})^{12\times10} \\ \\=5000(1+\frac{0.025}{12})^{120}=6418.46.[/tex]