Question

An initial deposit of $7,000 earns 6.5% interest, compounded monthly. How

much will be in the account after 5 years?

Answer 1

$34,300

Explanation:

First, we need to find how much interest is earned in one month : 7,000 * 6.5% = 455

455 is how much you gain monthly, multiply that by 12 to find the annual interest so 455 * 12 = 5,460

You then multiply that number by 5 to find the interest of the span of the 5 years

5,460 * 5 = 27,300

You add the original number to the interest with 27,300 + 7,000 = 34,300 in the account