Question

Valentina opened a savings account and deposited 1,000.00 as principal the account earns 3%interest compounded monthly what is the balance after 8 years

Answer 1

According to the problem, the principal is $1,000, the interest is 3% compounded monthly and the time is 8 years.

We have to use the compounded interest formula

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

Replacing the given information, we have

`A=1,000\cdot(1+(0.03)/(12))^(12\cdot8)`

Now, we solve for A

`\begin{gathered} A=1,000(1+0.0025)^(96) \\ A=1,000(1.0025)^(96) \\ A\approx1,270.87 \end{gathered}`

Hence, she will have $1,270.87 after 8 years.