Question

Jane deposited $10,000 into her bank account in December, 2011. Her account earns interest at a rate of 3% compounded monthly. How much money will she have in December of this year (2019)?

Answer 1

The top answer is correct but we need to round. Therefore, the answer is 12709

Answer 2

Answer: $ 12708.68

Explanation:

The Principal = $10,000

rate = 3%

Years = 2019 - 2011

therefore, years = 8

Since , it is compounded monthly , we will use the formula

A = P
`(1+(r)/(k)) ^(Nk)`

Where A is the amount

P = Principal

r = rate

k = 12 , since it is compounded monthly

N = number of years

Substituting the values , we have

A = 10000
`(1+(0.03)/(12)) ^(8(12))`

A = 10000
`(1 +0.0025)^(96)`

A = 10000
`(1.0025)^(96)`

A = 10000(1.270868467)

A = $12708.68467

Therefore , she will have $ 12708.68 in December , 2019