Question

Isabel deposits $6,000 into an account that earns 1.5% interest compounded monthly. Assuming no more deposits and no withdrawals are made, how much money is in the account after 4 years?

Answer 1

Fv=6,000×(1+0.015÷12)^(48)
Fv=6,370.78

Answer 2

`6370.78\\`

Explanation:

The amount collected when compounded monthly
`A = P (1 + (r)/(n))^(nt) \\`

Where,

A = Total Amount (principal + interest)

P = Principal Amount

I = Interest Amount

r = Monthly nominal interest Rate

t = Time Involved in years

n = number of compounding periods per unit

Substituting the values in above equation, we get -

`A = P (1 + (r)/(n))^(nt)\\= 6000 (1 + (1.5)/(100 *12) )^(12 x 4)\\= 6370.78\\`