Question

hannah invested $500 into an account with a 6.5% intrest rate compounded monthly. how much will hannahs investment be worth in 10 years.

Answer 1

Using the formula for compound interest:

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

Where:

A = the future value of the investment

P = the principal (initial amount of investment)

r = the interest rate (as a decimal)

n = the number of times per year the interest is compounded

t = the time (in years)

Plugging in the values:

P = $500

r = 6.5% = 0.065

n = 12 (compounded monthly)

t = 10

A = 500(1 + 0.065/12)^(12*10)

A = $935.98

Hannah's investment will be worth $935.98 after 10 years.