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You deposit $9000 in a savings account that earns 3.6% annual interest compounded monthly.

User Drake Guan
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1 Answer

4 votes

Answer:

A(t) = 9000(1 + 0.036/12)^12t

[Function formula for the compound interest]

A = 9000(1 + 0.036/12)^12t

[General formula for the compound interest]

A(1) ≈ 9329.40 $

[Compound interest over 1 year]

Explanation:

Compound interest formula:

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

P is the principal or starting amount.

r is the interest rate.

n is the number of times compounded per year.

t is the period of time.

Given P is 9000, r is 3.6% or 0.036, n is 12 or monthly, and t is variable.

The following function represents the relationship over time:

A(t) = 9000(1 + 0.036/12)^12t

User ESR
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