Question

You deposit $ 1,821 in an account earning 3 % interest compounded monthly. How much will you have in the account in 1 years?$__________ (Give your answer accurate to 2 decimal places)

Answer 1

Using the compound interest formula:

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

Where:

A = Amount

P = Principal = $1821

r = Interest rate = 3% = 0.03

n = Number of times interest is compounded per year = 12

t = Time = 1

So:

`\begin{gathered} A=1821(1+(0.03)/(12))^(12\cdot1) \\ A\approx1876.39 \end{gathered}`

Answer:

$1876.39