Question

Amanda deposits $2,000 into a CD with 4% interest and is compounded monthly. How much
will be in the account after 4 years?

Answer 1

answer:

there will be $2346.40 after 4 years.

explanation:

$\sf A = P(1 + \frac{r}{n} )^{nt}$

"A" - money after compound interest, "P" - money deposited, "r" - rate of interest, "t" - time (years)

given:

• P = $2000
• r = 4%
• t = 4 years

using the formula:

$\sf A = 2,000(1 + \frac{0.04}{12} )^{12*4}$

$\sf A = 2,346.40$

'compounded monthly so n will be 12 months'

Answer 2

Answer:

$2,346.40 (nearest cent)

Step-by-step explanation:

$B = P(1 + \frac{r}{n})^{nt}$

where B is the balance, P is the principal amount, r is the interest rate in decimal format, t is the time in years and n is the number of times interest is compounded per year

• P = 2000
• r = 4% = 4/100 = 0.04
• n = 12
• t = 4

$\implies B = 2000(1 + \frac{0.04}{12})^{4\times12}$

$\implies B = \ 2346.40$