Question

Every month, Veronica deposits $230 in an account with an interest rate of 6% compounded monthly. How much money will she have in the account at the end of the first 5 years? (Round to the nearest cent. Do not enter the $ sign.)

Answer 1

Veronica will have $310.04 at the end of first five years.

Explanation:

Principal Amount P = $230

Interest Rate r = 6%

Time t = 5 years

Compounded monthly n = 12

We need to find the future amount (A)

The formula used is:
`A=P(1+(r)/(n))^(nt)`

Putting values and finding A

`A=P(1+(r)/(n))^(nt)\\A=230(1+(0.06)/(12))^(5*12)\\A=230(1+0.005)^(60)\\A=230(1.005)^(60)\\A=230(1.348)\\A=310.04`

So, Veronica will have $310.04 at the end of first five years.