Question

James deposits $2000 into a bank account that pays 4.5% interest compounded monthly. How much money is in the account after 5 years (round your answer to the nearest hundredth) ?

Answer 1

The answer is $2,504

The formula for annual compound interest, including principal sum, is:
A = P (1 + r/n) (nt)Where:A = the future value of the investment/loan, including interest
P = the principal investment amount (the initial deposit or loan amount)
r = the annual interest rate (decimal)
n = the number of times that interest is compounded per year
t = the number of years the money is invested or borrowed forNote that this formula gives you the future value of an investment or loan, which is compound interest plus the principal. Should you wish to calculate the compound interest only, you need this:Total compounded interest = P (1 + r/n) (nt) - P

Answer 2

I dont know if this is right, but I think its $125,400.

Hope this helps!