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Mike Branson invested his summer earnings of $6000 in a savings

account for college. The account pays 2.5% interest. How much will
this amount to in 3 months?

1 Answer

2 votes

Final answer:

The amount in the savings account after 3 months will be approximately $6007.66.

Step-by-step explanation:

To find out how much the savings account will amount to in 3 months, we need to calculate the interest earned. First, we need to calculate the amount of interest earned in 3 months. The formula to calculate the interest earned is A = P(1 + r/n)^(nt), where A is the amount after interest, P is the principal (initial amount), r is the annual interest rate, n is the number of times interest is compounded per year, and t is the time in years. In this case, the principal is $6000, the annual interest rate is 2.5%, the number of times interest is compounded per year is 1, and the time is 3 months (or 1/4 of a year).

Plugging in these values into the formula, we have:

A = 6000(1 + 0.025/1)^(1/4)

A = 6000(1 + 0.025)^(1/4)

A = 6000(1.025)^(1/4)

A ≈ 6007.66

Therefore, the amount in the savings account after 3 months will be approximately $6007.66.

User Dean Wild
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