Question

3. Carmen invested $3000 in an account

that pays 3.6% annual interest
compounded monthly. To the nearest
whole dollar, what will be the balance
in her account after 6 years?
A. $3223 B. $3648
C. $3709 D. $3722

Answer 1

C) $3722.

Explanation:

Given: Carmen invested $3000 in an account that pays 3.6% annual interest compound monthly. To the nearest whole dollar, what will be the balance in her account after 6 years?

The formula to compound interest is:

I = P(1 + R)^T

Put in the terms:

I = $3000(1 + 3.6%)^6

I = $3000(1 + 0.036)^6

I = $3000 x 1.036^6

I = $3000 x 1.23639868

I = $3709.19604

Rounded, that's C) $3722.

Answer 2

Answer: C. $3709

Explanation:

Using the formula to calculate amount(A) , which is given as :

A = p
`(1+r)^(n)` , where

A = amount

P = principal

r = rate

n = number of years

From the question,

A = ?

P = $3000

r = 3.6%

n = 6

substituting into the formula , we have

A = 3000
`(1+0.036)^(6)`

A = 3000
`(1.036)^(6)`

A = 3000 (1.236398679)

A = 3709. 196038

To the nearest dollar

A = $3709