Question

If 2000 dollars is invested in a bank account at an interest rate of 6 percent per year, find the amount in the bank after 7 years if the interest is compounded monthly

Answer 1

$3007.26

Explanation:

Step one:

given data

Principal= $2000

rate= 6%= 0.06

time= 7years

Required:

The final amount A

Step two:

the expression for the compound interest is

`A= P(1+r)^t`

substituting we have

`A= 2000(1+0.06)^7\\\\A= 2000(1.06)^7\\\\A=2000*1.50363\\\\A=3007.26`