467,013 views
20 votes
20 votes
Find the value of $1000 deposited for 10 years in an account paying 6% annual interest compound

monthly.

User Francesco Galgani
by
2.9k points

1 Answer

23 votes
23 votes

Answer:

You have to use the formula for compound interest which is: A=P(1+r/n)^nt

The Givens info is:

A=?

P=1000

r= 6% = 0.06 (convert into decimal)

n=12(# of interest periods: since it is monthly n=12)

t=10

Now your formula should look like this:

A= 1000*(1+(0.06/12))^12*10

A=1000*(1.005)^120

A=1000*(1.819396734)

A=$1819.40

Explanation:

User StudioTime
by
2.9k points