Question

Meg invested $16,000 in a savings account . If the interest rate is 6% per year, how much will be in the account in 5 years for monthly compounding? Round your answer to two decimal places

Answer 1

`~~~~~~ \textit{Compound Interest Earned Amount} \\\\ A=P\left(1+(r)/(n)\right)^(nt) \quad \begin{cases} A=\textit{accumulated amount}\\ P=\textit{original amount deposited}\dotfill &\$16000\\ r=rate\to 6\%\to (6)/(100)\dotfill &0.06\\ n= \begin{array}{llll} \textit{times it compounds per year}\\ \textit{monthly thus twelve} \end{array}\dotfill &12\\ t=years\dotfill &5 \end{cases} \\\\\\ \\\\ A=16000\left(1+(0.06)/(12)\right)^(12\cdot 5)\implies A=16000(1.005)^(60)\implies A\approx 21581.60`