Question

You invest $300 in an account that has an interest rate of 1.3%, compounded monthly. How much money is in the account after 20 years? Round your answer to the nearest whole number.

Answer 1

The formula is
A=p (1+r/k)^kt
A future value?
P present value 300
R interest rate 0.013
k compounded monthly 12
T time 20 years
A=300×(1+0.013÷12)^(12×20)
A=389.02

Answer 2

$389

Explanation:

The formula for final value of compound interest is given by

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

Here, we have

P = $300

r = 0.013

t = 20 years

n = 12

Substituting these values and find A

`A=300(1+(0.013)/(12))^(12\cdot20)\\\\A\approx389`

Therefore, in 20 years, the account will have $389.