Question

You deposit $2000 in an account that earns 5% annual interest. Find the balance in the account after 8 years if the interest is compounded monthly

Answer 1

FORMULA FOR COMPOUND INT. = A = P ( 1 +
`(R)/(100)`)
`^(n)`

= P = 2000, R =
`(5)/(12)` ( as it is compounded monthly ), N= 8 × 12 = 96

= A = 2000
`(` 1 +
`(5)/(1200)`
`)^(96\\)` =
`(2000)/(1)` × (
`(1205)/(1200)`)
`^(96)`

= 2981.17