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Sally invests $10,00o into a new bank account at 8.4% interest compoundedmonthly. How much money will Sally have in the account in 30 years to the nearestcent?

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EXPLANATION

The compound interest formula is


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

P= Principal = $10,000

Interest rate = 8.4% = 0.084 in decimal form

n= Number of times interest rate is compounded per unit "t" = 12

t= Time = 30 years

Replacing terms:


A=10,000(1+(0.084)/(12))^(12\cdot30)

Multiplying and dividing numbers:


A=10,000(1+0.007)^(360)

Adding numbers:


A=10,000\cdot\text{1}.007^(360)

Solving the power:


A=10,000\cdot12.32

Multiplying terms:


A=\text{ 123,200}

Sally will have $123,200 in 30 years.

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