Question

You deposit $500 in a savings account that earns 9% interest compounded monthly. find the amount the account after 5 years.​

Answer 1

$782.84

Explanation:

Compound interest is defined as:

`a = p {(1 + (r)/(n) )}^(nt)`

Where:

a = final worth

p = principal / original value

r = decimal rate of interest

n = repetitions per annum

t = number of years

In this case:

`a = 500 {(1 + (0.09)/(12) )}^(5 * 12) \\ a = 500 {(1.0075)}^(60) \\ a = 782.84`