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Bryan puts $200.00 into an account to use for school expenses. The account earns 3% interest, compounded monthly. How much will be in the account after 5 years?

User Vatsala
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1 Answer

5 votes
ANSWER -

We can use the formula for compound interest to solve this problem:

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

where:
A = the amount of money in the account after 5 years
P = the principal (initial amount), which is $200.00
r = the annual interest rate, which is 3% or 0.03 as a decimal
n = the number of times the interest is compounded per year, which is 12 since it is compounded monthly
t = the time in years, which is 5

Plugging in these values, we get:

A = $200.00(1 + 0.03/12)^(12*5)
A = $200.00(1.0025)^60
A = $200.00(1.1665)
A = $233.30

Therefore, there will be $233.30 in the account after 5 years.
User Larme
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