The formula for compounded interest in this type of equation is:
[tex] A = P(1+\frac{r}{n})^{nt} [/tex] where A is the amount at the end of the time period, P is the principal amount you start with, R is the interest rate, N is the amount of compound periods, and T is the time allotted for the money to gain interest.
P = 5000, R = 3% or 0.03, N = monthly so 12, T = 2 years
Plug in our given information into the equation:
[tex] A = 5000(1 +\frac{.03}{12})^{12(2)} \\ A = 5000(1 + \frac{.03}{12})^{24} [/tex]
Let the calculator do the work here...
A ≈ 5308.785 which rounds to A ≈ 5308.79
Option A is your answer.
