Question

You deposit $6000 In an account earning 3% interest compounded monthly. How much will you have in the account in 10 years?

Answer 1

After 10 years, you will have approximately $8099.15 in the account.

To solve this problem

We can use the compound interest formula:

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

Where:

• A is the future value of the investment/loan, including interest
• P is the principal amount (the initial deposit or loan amount)
• r is the annual interest rate (decimal)
• n is the number of times that interest is compounded per year
• t is the time the money is invested or borrowed for, in years

In this case:

P = $6000

r = 0.03 (3% as a decimal)

n = 12 (compounded monthly)

t = 10 years

Substitute these values into the formula:

`A = 6000 * (1 + 0.03/12)^(^1^2^*^1^0)`

Now, calculate this expression:

A ≈
`6000 * (1.0025)^(^1^2^0)`

A ≈ 6000 * 1.349858807

A ≈ $8099.15

Therefore, after 10 years, you will have approximately $8099.15 in the account.