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If you deposit $4000 into an account paying 9% annual interest compounded monthly, how much money will be in the account after 5 years?

User Ymutlu
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1 Answer

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Final answer:

The account will have approximately $5,948.69 after 5 years.

Step-by-step explanation:

To calculate the amount of money that will be in the account after 5 years, we can use the formula for compound interest: A = P(1 + r/n)^(nt), where A is the final amount, P is the principal amount (initial deposit), r is the annual interest rate (9% in this case), n is the number of times the interest is compounded per year (12 for monthly compounding), and t is the number of years.

Using this formula, we can calculate:

A = 4000(1 + 0.09/12)^(12*5)

A ≈ 4000 * 1.0075^60 ≈ 4000 * 1.487172 ≈ $5,948.69

Therefore, after 5 years, there will be approximately $5,948.69 in the account.

User Teshguru
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