Question

If an individual saves $5,700 and elects to place the total dollar amount into a savings account earning 2.75% APR compounded monthly, how much will the original deposit grow to in 12 years?

Answer 1

$7,925.53

Explanation:

We'll have to use the compound interest formula: A = P(1 + r/n)ⁿˣ

A = final amount (?)

P = starting amount (5700)

r = rate

n = times applied (12 since its monthly and there 12 months in a year)

x = years (12)

A = 5700(1 + 0.0275/12)¹⁴⁴

A = 7925.525498629932