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If you deposit $2000 in an account paying 2% annual interest compounded monthly, how much money will you have in the account after 40 years?

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Answer: To calculate the amount of money you will have in the account after 40 years, we can use the formula for compound interest:

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

where A is the amount of money in the account after t years, P is the principal (the initial amount of money deposited), r is the annual interest rate (as a decimal), n is the number of times the interest is compounded per year, and t is the number of years.

In this case, P = $2000, r = 0.02 (since the interest rate is 2%), n = 12 (since the interest is compounded monthly), and t = 40. Plugging these values into the formula, we get:

A = 2000(1 + 0.02/12)^(12*40)

A = $5,837.85

So you will have $5,837.85 in the account after 40 years.

User Marc Sloth Eastman
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