Final answer:
To calculate the future value of an investment with compound interest, you can use the formula A = P(1 + r/n)^(nt). In this case, Micah invested $5,280 at an interest rate of 4.2% compounded monthly, resulting in a future value of approximately $5,548.95.
Step-by-step explanation:
To calculate the future value of an investment with compound interest, you can use the formula:
A = P(1 + r/n)^(nt)
Where:
- A is the future value
- P is the principal amount (initial investment)
- r is the annual interest rate (expressed as a decimal)
- n is the number of times that interest is compounded per year
- t is the number of years
In this case, Micah invested $5,280 at an interest rate of 4.2% compounded monthly. So, we have:
A = 5280(1 + 0.042/12)^(12*1)
Simplifying the equation gives:
A ≈ $5,548.95