Question

A $3,000 deposit for 60 months compounded at an annual interest rate of 2.6%.

Interest earned _________
Account balance _________

Answer 1

Interest earned and account balance can be calculated using the formula for compound interest.

Step-by-step explanation:

To calculate the interest earned and the account balance, we can use the formula for compound interest:

Account Balance = Principal (1 + Interest Rate)^(Number of Times Compounded)

For this question, the principal is $3,000, the interest rate is 2.6% (or 0.026 as a decimal), and the number of times compounded is 60 (since it's compounded monthly over 5 years).

Using the formula, we can calculate the interest earned and the account balance:

Interest earned = Account Balance - Principal

Account Balance = Principal (1 + Interest Rate)^(Number of Times Compounded)