Question

7. Reggie deposited $1,000 into an account that earns 5% compound interest monthly. If he does not deposit anymore into the account or take any money out of the account how much will the account be worth in 10 years?

Answer 1

Given :

Reggie deposited $1,000 into an account that earns 5% compound interest monthly.

To Find :

Worth of money after 10 years.

Solution :

We know, final amount is given by :

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

Here, P = initial balance

r = interest rate

n = number of times interest applied per time period

t = number of time period

Putting all given values in above equation, we get :

`A=1000(1+(0.05)/(12))^(12* 10)\\\\A =\$1647.01`

Therefore, money in his account after 10 years is $1647.01 .

Hence, this is the required solution.