Final answer:
To find out how much Frank will have in his account after 5 years, one would use the compound interest formula, substituting the given values for principal, rate, compounding frequency, and time.
Step-by-step explanation:
The student asks how much Frank will have in his account after 5 years if he deposits $8,500 at an interest rate of 4.5% compounded monthly. To calculate the future value of this investment, we can use the formula for compound interest: A = P (1 + r/n)^(nt), where:
- A is the amount of money accumulated after n years, including interest.
- P is the principal amount (the initial amount of money).
- r is the annual interest rate (decimal).
- n is the number of times that interest is compounded per year.
- t is the time the money is invested for, in years.
Plugging in the values:
- P = $8,500
- r = 4.5/100 = 0.045
- n = 12 (since the interest is compounded monthly)
- t = 5
The calculation will be:A = 8500 (1 + 0.045/12)^(12*5).
Calculating this, we get the future value that Frank will have in his account after 5 years.