Question

Meg invested $16,000 in a savings account. if the interest rate is 6% per year, how much will be in the account in 5 years with monthly compounding? round your answer to the nearest cent. do not round until you calculate the final answer provide your answer below:

Answer 1

After 5 years, with monthly compounding at a 6% annual interest rate, Meg's $16,000 investment will amount to $21,581.60.

Step-by-step explanation:

Meg invested $16,000 at a 6% annual interest rate with monthly compounding. To calculate the future value of the investment:

FV = P(1 + r/n)nt

Where:

FV = future value of the investmentP = principal amount ($16,000)r = annual interest rate (0.06)n = number of times the interest is compounded per year (12)t = number of years (5)

Plugging the values in, we get:

FV = 16,000(1 + 0.06/12)12 * 5

FV = 16,000(1 + 0.005)60

FV = 16,000(1.005)60

FV = 16,000 * 1.34885

FV = $21,581.60

Therefore, after 5 years, the account will have grown to $21,581.60, when rounded to the nearest cent.