Final answer:
After 5 years with a $4,000 deposit earning 5% interest compounded monthly, you will have approximately $5,133.43 in the account.
Step-by-step explanation:
To find out how much you will have in your account after 5 years with monthly compounded interest, you can use the compound interest formula: 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 in years.
In your case:
- P = $4,000
- r = 5% or 0.05
- n = 12 (since interest is compounded monthly)
- t = 5 years
So, the formula will look like this:
A = 4000(1 + 0.05/12)12*5
Carry out the calculations:
A = 4000(1 + 0.00416667)60
A = 4000(1.00416667)60
A = 4000(1.2833582)
A = $5,133.43
Therefore, after 5 years, you will have approximately $5,133.43 in the account, rounded to the nearest penny.