Question

Jane deposited $10,000 into her bank account in December, 2010. Her account earns interest at a rate of 5% compounded monthly. How much money will she have in December of this year (2018)?

Round your answer to the nearest whole number.
Compound Interest: A = P ( 1 + r/n )^nt

Answer 1

14905.85

Explanation:

P(1+r/n)^nt

10000 (1 + (.05/12))^ (12*8)

Answer 2

she will have $14,906 in December of year 2018

Explanation:

To find the amount of money she will have in December of the year 2018, we will simply use the formula;

Compound Interest: A = P ( 1 + r/n )^nt

where p = principal

R = rate

n = the number of times the interest is compounded per unit time

T = time

A= Accrued amount

From the question

Principal (p) = $10,000

Rate (r) = 5% = 0.05

Time(t) = 2018-2010 = 8 years

n = 12

We can now proceed to insert the values into our formula;

Compound Interest: A = P ( 1 + r/n )^nt

= $10 000 ( 1 + 0.05/12) ^12×8

=$10,000(1 + 0.00416667)^96

= $10 000(1.00416667)^96

=$10 000(1.4905859)

=$14,905.895

≈$14,906 to the nearest whole number.

Therefore she will have $14,906 in December of year 2018