Question

You are trying to save money for college so you put $5000 in a savings account that will compound interest monthly at 2% How much money will you have in the account after 5 years?

Answer 1

To find out how much money you will have in the account after 5 years with compound interest, use the formula A = P(1 + r/n)^(nt).

Step-by-step explanation:

To find out how much money you will have in the account after 5 years, we need to use the compound interest formula. The formula is:

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

Where:

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

In this case, P = $5000, r = 2% (0.02 in decimal form), n = 12 (compounded monthly), and t = 5. Plugging in these values, we get:

A = 5000(1 + 0.02/12)^(12*5) = $5510.98

So, you will have approximately $5510.98 in the account after 5 years.