Question

Please help me with this question thank you

Answer 1

Given:

Deposit = $7500

Rate of interest = 2.75%

Time = 4 years

Compounded monthly

n = 12

To find:

The balance in the account after 4 years

Solution:

Compound interest formula:

`$A=P\left(1+(r)/(n)\right)^(n t)`

Here P = $7500, r = 2.75%, n = 12 and t = 4.

`$A=7500\left(1+(2.75\%)/(12)\right)^(12* 4)`

To convert percentage into fraction, divide by 100.

`$A=7500\left(1+((2.75)/(100) )/(12)\right)^(48)`

`$A=7500\left(1+(0.0275 )/(12)\right)^(48)`

`$A=7500\left((12+0.0275 )/(12)\right)^(48)`

`$A=7500\left((12.0275 )/(12)\right)^(48)`

`$A=8371.03`

The balance in his account after 4 years is $8371.03.