Question

Christian invested $2,300 in an account paying an interest rate of 5.5% compounded monthly. Assuming no deposits or withdrawals are made, how much money, to the nearest ten dollars, would be in the account after 20 years?

Answer 1

Answer: A = $4,830.00

(I = A - P = $2,530.00)

Explanation:

Equation:

A = P(1 + rt)

Calculation:

First, converting R percent to r a decimal

r = R/100 = 5.5%/100 = 0.055 per year.

Solving our equation:

A = 2300(1 + (0.055 × 20)) = 4830

A = $4,830.00

The total amount accrued, principal plus interest, from simple interest on a principal of $2,300.00 at a rate of 5.5% per year for 20 years is $4,830.00.