18.5k views
0 votes
If you deposit $2,000 into an account that pays 2% annual interest compounded monthly, how much money will be in the account in 5 years?

User Luistm
by
7.9k points

1 Answer

7 votes

9514 1404 393

Answer:

$2,210.16

Explanation:

The applicable formula for the account balance is ...

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

where principal P is invested at annual rate r compounded n times per year for t years. Here, we have P=2000, r=0.02, n=12, t=5. The balance is ...

A = $2000(1 +0.02/12)^(12·5) = $2210.16

__

Numerous calculators, apps, web sites, and spreadsheets can figure this for you.

If you deposit $2,000 into an account that pays 2% annual interest compounded monthly-example-1
User Xyanight
by
7.7k points

No related questions found

Welcome to QAmmunity.org, where you can ask questions and receive answers from other members of our community.

9.4m questions

12.2m answers

Categories