Question

Annalise invested $3,300 in an account paying an interest rate of 2.8% compounded monthly. Assuming

no deposits or withdrawals are made, how much money would be in the account after 14 years? Round
to the nearest cent (two decimal places).

Answer 1

$4,881.56

Explanation:

The future value formula is ...

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

where principal P is invested at annual rate r compounded n times per year for t years.

You have P=3300, n=12, r=0.028, t=14, so the future value is ...

FV = $3300(1 +0.028/12)^(12·14) = $4881.56

There would be $4881.56 in the account after 14 years.