Question

Question 1 (1 point)

Danny wants to buy a truck in 4 years. He is going to put away $2,500.00 into his savings account that will pay him 6.75% interest compounded
monthly. How much will he have when he withdraws the funds to give a down payment?

Answer 1

Amount after 4 years = $3274.125

Explanation:

Time t= 4 years

Principal amount p= $2500

Interest rate R= 6.75%

Number of times compounded n= 4*12

Number of times compounded n= 48

Amount A = p(1+r/n)^(nt)

A= 2500(1+0.0675/48)^(48*4)

A= 2500(1+0.001406)^(192)

A= 2500(1.001406)^192

A= 2500(1.30965)

A= 3274.125

Amount after 4 years = $3274.125