Question

Liam opened a savings account and deposited 600.00 as principal the account earns 6%interest compounded monthly what is the balance after 10 years

Answer 1

the compound interes formula is given by

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

where A is the amount, P the principal, r the rate, t the time and n the number of times interest.

In our case, we can see that

`\begin{gathered} P=600 \\ r=0.06 \\ t=10 \\ n=12\text{ (montly)} \\ by\text{ substituying these values into the formula, we have} \end{gathered}`
`\begin{gathered} A=600(1+(0.06)/(12))^(12\cdot10) \\ A=600(1.005)^(120) \\ A=600(1.819) \\ A=1091.64 \end{gathered}`

hence, after 10 years, Liam will have 1091.64 dollars in his account.