Question

Carlos put $3000 in a savings account that pays 2.3% interest, compounded monthly for 6 years. How much money was in the account after 6 years?

A. $3,429.28
B. $3,419.28
C. $3,529.28
D. $3,409.28

Answer 1

To calculate the amount of money in the account after 6 years with compound interest, use the formula A = P(1 + r/n)^(nt). Plugging in the given values, the amount is $3,429.28.

Step-by-step explanation:

To calculate the amount of money in the account after 6 years with compound interest, we can use the formula:

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

where:

• A is the final amount in the account
• P is the principal amount (initial deposit)
• r is the annual interest rate (in decimal form)
• n is the number of times interest is compounded per year
• t is the number of years

In this case, the principal amount is $3000, the annual interest rate is 2.3% (or 0.023 in decimal form), interest is compounded monthly (so n = 12), and the number of years is 6. Plugging these values into the formula, we get:

A = 3000(1 + 0.023/12)^(12*6) = $3,429.28

Therefore, the answer is A. $3,429.28.