Question

write a compound interest function to model the following situation. then find tbe balance after the given number of years.

$5,400 invested at a rate of 2.4%, compounded monthly; 5 years

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Answer 1

Answer:

$\ 6,087.75$  

Step-by-step explanation:

we know that    

The compound interest formula is equal to  

$A=P(1+\frac{r}{n})^{nt}$  

where  

A is the Final Investment Value  

P is the Principal amount of money to be invested  

r is the rate of interest  in decimal

t is Number of Time Periods  

n is the number of times interest is compounded per year

in this problem we have  

$t=5\ years\\ P=\ 5,400\\ r=0.024\\n=12$  

substitute in the formula above  

$A=\ 5,400(1+\frac{0.024}{12})^{12*5}$  

$A=\ 5,400(1.002)^{60}=\ 6,087.75$