Question

Joseph Renfer deposited $2,400 in a new savings account on March 1. The savings account earns 6% interest compounded monthly.

Answer 1

At the end of 1 years, your savings will have grown to $4,944.

You will have earned in $144 in interest.

Answer 2

After one year, Joseph would have $2548.03.

Explanation:

Givens:

• Principal is $2,400.
• Rate of interest is 6%.
• The amount is compounded monthly.

To solve this problem we have to use the interest compound formula:

`A=P(1+(r)/(n))^(nt)`

Where A is the final amount, P is the principal, r is the rate of interest in decimal number, n is the amount of periods compounded per year and t is the time in years.

Now, to know how much would have Joseph after one year, we have:

`A=2400(1+(0.06)/(12))^(12(1)) \\A=2400(1.06)=2548.03`

Therefore, after one year, Joseph would have $2548.03.